9911796707
TMI Blog2019 (1) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... ture without issuing invoice and without payment of central excise duty along with receipts of cash for such sales were recovered under mahazar. Statements were recorded. Basing on such evidence gathered, show cause notice was issued to the appellant proposing to demand excise duty of Rs. 68,77,758/- for the period 2004 - 05 to 2007 - 08 (upto August 2007) along with interest and also for imposing penalties. The amount already paid by the appellant was sought to be appropriated. After due process of law, the Commissioner vide the order impugned herein confirmed the demand along with interest and also imposed equal penalty besides separate penalty on the Director of the company. Aggrieved, the appellants are now before the Tribunal. 2. On behalf of the appellant, ld. counsel Shri M. Karthikeyan appeared and argued the matter. He submitted that the evidence relied upon by the department is the statements recorded during investigation. Though computer documents were recovered at the time of search, the procedure prescribed under Section 36B of Central Excise Act, 1944 was not complied by the department and the Commissioner himself after analyzing the provision has held that data retr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e years in dispute, it is very clear that the appellant is engaged in trading of furniture also and such sales on cash basis have been wrongly reckoned as sale of manufactured items without payment of duty. 2.4 The charge of clandestine removal of furniture by the appellant is not at all based on any valid evidence. The vital fact that the appellant has been engaged in various trading activities has been completely ignored in the show cause notice. The computer print outs relied upon by the department in support of the allegations and for quantification of duty are not at all legally permissible evidences and they lack evidentiary value as held by the adjudicating authority. The statements recorded and relied upon are not admissible as evidence in the absence of examination in terms of Section 9D. The other documents relied upon by the department are also not capable of proving the charge of clandestine manufacture. It has been time and again reiterated by various judicial pronouncements that the charge of clandestine removal has to be proved with cogent evidences and the demand cannot be confirmed on the basis of presumptions and assumptions. Hence, it is humbly prayed that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accountant. Thus, the statements of these two employees would support the computer print outs. The allegation of clandestine removal is forcefully established by the department. The demand, interest and the penalties imposed therefore require no interference. 4. Heard both sides. 5. The allegation is that the appellant has clandestinely manufactured and cleared furniture and thus evaded excise duty. 5.1 The main evidence relied by the department is the data / computer print outs retrieved from the computers which was used in head office / factory etc. These computers were seized from the premises. These computers itself were seized by the department under mahazar dated 11.9.2007. They were later opened at the office of DGCEI at Coimbatore. The officers then browsed through the contents and took few print outs of certain ledger folios as detailed in the Annexure to the mahazar dated 17.9.2007. The two hard disks contained in the computers were removed thereafter from the computers and seized under mahazar dated 17.9.2007. 5.2 Section 36B of the Central Excise Act, 1944 envisages conditions for admissibility of such date retrieved from computer. The said provision is reproduced a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly performed by computers, whether - (a) by a combination of computers operating over that period; or (b) by different computers operating in succession over that period; or (c) by different combinations of computers operating in succession over that period; or (d) in any other manner involving the successive operation over that period, in whatever order, of one or more computers and one or more combinations of computers, all the computers used for that purpose during that period shall be treated for the purposes of this section as constituting a single computer; and references in this section to a computer shall be construed accordingly. (4) In any proceedings under this Act and the rules made thereunder where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say, - (a) identifying the document containing the statement and describing the manner in which it was produced; (b) giving such particulars of any device involved in the production of that document as may be appropriate for the purpose of showing that the document was produced by a computer; (c) dealing with any of the matters to whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d signature in the mahazar dated 17.9.2007 at the office of DGCEI were present at the appellant's premises on 11.9.2007 at the time of search, instead of retrieving the data from the appellant premises itself, the computers as a whole have been seized and taken to the office of DGCEI. Further, on 27.9.2007, 27.8.2008, 26.9.2007 also print outs were taken. Para 45 of show cause notice says that the quantification of duty has been based on the print outs from the computers seized as per mahazar from factory and Head office. Then it becomes highly necessary on the part of department to establish that the provisions of Section 36B has been complied. 5.4 In para 72 of the impugned order, the Commissioner has addressed this issue of the requirement to comply with the provisions of Section 36B of the Act ibid and has observed as under:- "In this case, it is apparent that the data contained in the computer was fed by Shri Arun from March 2006 and earlier two employees, who were no more in service maintained the computers. No statements were recorded from the said employees concerning the data and the computer print outs. Even the statement dated 27.9.2007 recorded from Shri Arun was sile ..... X X X X Extracts X X X X X X X X Extracts X X X X
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