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TMI Blog2019 (1) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner. Therefore, there appears to be violation of principle of Natural justice in the present case. However, since the matter is old and the relied upon documents are available on record, we proceed to decide the matter in view of submission made by both sides and evidence available on record, instead of remanding the matter back to the Adjudicating Authority. Shortage detected in the stock of finished goods - Held that:- We have gone through the statement recorded by the officers and we find no mention of the method of physical verification. Nor any calculation chart is made part of panchnama. Thus, we agree with the appellant that verification of stock was by eye estimation only. More over there is no dispute to the fact stated by the appellant company in their reply, that the shortage in case of MS Ingots was 3.24 % and that of TMT bars was 1.4 % of the total production. Such difference in quantity is normal in case of eye estimation of the stock - the allegation of clandestine removal on the basis of the so called shortage in stock of final products is un-sustainable and demand in this regard is fit to be set aside. Figures in Computer printout/loose slips - Held that:- There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced. Therefore, we have no hesitation in holding that the allegation of clandestine removal of excisable goods is not proved in this case - demand is set aside - appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... he production shown in their statutory records and quantity of clandestine production shown in the computer printout and slips recovered. The production figure so calculated was divided by numbers of units of electricity consumed by the assessee and the actual production was calculated by applying the average production per unit of electricity consumption. The investigating officers came to the conclusion that the excess production arrived at by using average production on the basis of electricity consumption had been removed by the appellant company clandestinely without payment of duty. In course of investigation the officers recorded statement of Shri Rakesh Bhatnagar, GM on 21.09.2011, 23.09.2011, 24.09.2011, 07.03.2012 and 12.03.2012; statement of Anil Kumar Sharma-Authorised Signatory on 21.09.2011, 23.09.2011, 24.09.2011, 07.03.2012 and 12.03.2012; statement of Dinesh Kumar Goswami-Excise Executive, on 21.09.2011 and 23.09.2011; and statement of Chirag Sharma- Marketing Manager, on 15.03.2012 under section 14 of Central Excise Act 1944. During investigation the appellant company deposited amount of ₹ 1,40,93,564/- on various date(s) as per direction of the investigatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount deposited by the appellant company in course of investigation, against the demand of duty so confirmed by him. He was also pleased to levy interest on the amount of duty confirmed and also to impose penalty under section 11AC of Central Excise Act 1944/Rule 25 of Central Excise Rules 2002. He was also pleased to impose penalty on other appellants under rule 26 of the Central Excise Rules 2002. The operative portion of the order in original in tabular form is given below:- SCN Dt. Duty Demand on Appellant Co. Penalty on Appellant Co. Penalty on Kamal Jeet Singh Penalty on Karan Pal Singh Penalty on Pawan Jeet Singh Penalty on Rakesh Bhatnagar SCN dt. 03.05.2012 8,91,72,830/- 8,91,72,830/- U/s 11AC 50,00,000/- 50,00,000/- 50,00,000/- 10,00,000/- SCN dt. 06.02.2013 2,27,64,776/- 2,27,64,776/- U/s 11AC 20,00,000/- 20,00,000/- 20,00,000/- 5,00,000/- SCN dt 25.07.2011 11,00,285/- 2,00,000/- U/r 25 2,00,000/- 2,00,000/- 2,00,000/- 50,000/- 5. The appellants are before this Tribunal in appeal against the said Order-in-Original dt.31.03.2014 passed by Learned Commissioner of Central Excise, Jaipur-I. 6. The Learned Advocate appearing on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, which cannot be taken as a valid evidence for alleging clandestine removal. It is settled law that clandestine removal cannot be based on presumption and assumptions. 9. The learned advocate further stated that the panchnama in the present case has not been drawn properly in as much as the places of recovery of computer print outs and loose slips is not indicated in the panchnama. In addition it appears that no panchnama or seizure memo or detention memo in respect of computer and other documents had been prepared. Thus, the panchnama drawn is vitiated and hence cannot be taken as evidence to hold against the appellant. Moreover the parameters for taking computer printout as evidence are clearly specified in section 36 B of Central Excise Act 1944. There is nothing to show fulfilment of the prescribed parameter in respect of the computer printout relied upon by the department, to hold against the appellant. Thus, the demand of duty calculated on the basis of figures in the computer printout and loose slips is unsustainable. 10. The learned advocate also submitted that the demand of duty on the quantity of final product calculated on the basis of electricity consumption is uns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 57) ELT 742 (Tri.)] 11. Super Cassettes Industries Ltd. Vs CCE [2017 (347) ELT 145 (Tri.)] 12. CCE Vs Nissan Thermoware P. Ltd. [2011 (266) ELT 45 (Guj.)] 13. CCE Vs M.S.P. Steel & Power Ltd. [2017 (357) ELT 275 (Tri.)] 14. Varun Dyes Chemicals Pvt Ltd. Vs CCE [2007 (218) ELT 420 (Tri.)] 15. Mahavir Metals Industries Vs CCE [2014 (313) ELT 581 (Tri.)] 16. Premium Packaging Pvt Ltd. Vs CCE [2005 (184) ELT 165 (Tri.)] 17. R.A. Castings Pvt Ltd. Vs CCE [2009 (237) ELT 674 (Tri.)] 18. CCE Vs R.A. Castings Pvt Ltd. [2011 (269) ELT 337 (All.)] 19. Commissioner Vs R.A. Castings Pvt Ltd. [2011 (269) ELT A108 (S.C.)] 20. Om Shanti Steel & Castings Pvt Ltd. Vs UOI [2017 (347) ELT 441 (Jhar.)] 21. Savitri Concast Ltd. Vs CCE [2015 (329) ELT 213 (Tri.)] 22. Madhu Foods Products Vs CCE 91-94[1995 (76) ELT 197 (Tri.)] 23. T.G.L. Poshak Corporation Vs CCE [2002 (140) ELT 187 (Tri.) 20. Oudh Sugar Mills Ltd. Vs UOI [1978 (2) ELT (J172) (S.C.)] 21. Saraya Steel Ltd. Vs CCE [1998 (98) ELT 787 (Tri.)] 22. P.S.P. Appliances (P) Ltd. & Ors. Vs CCE [2005 (70) RLT 431 (Tri.)] 23. CCE Vs Universal Polythene Industries [2001 (130) ELT 228 (Tri.)] 24. Utk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above shortage as well as clandestine removal of the above said TMT bars during Aug. 2011 and even paid ₹ 15,46,849/- vide Cheque No. 484353 dated 21.09.2011 and also paid ₹ 4,71,695/- through debit in RG 23 Pt-II on 22.09.2011. 15.3. Sh. Rakesh Bhatnagar, GM and Sh. Anil K Sharma, Authorised Signatory and Sh. Dinesh K Goswami, Excise Executive in their statement dated 23.09.2011, i.e. two days after the said search admitted that the recovered documents belonged to thecompany and that that they pertain to the production, sale, debtor, creditors of the company, that these documents were authored by Sh. Dinesh Goswami and Sh. Chirag Sharma, Purchase Officer. 15.4. Sh. Rakesh Bhatnagar, GM admitted the alleged clandestine sales/clearances arrived by officers at on the basis of recovered documents and paid ₹ 80,00,000/- vide Cheque dtd. 28.09.2011 against recoverable duty of ₹ 1,10, 25,351/- for the months of April, 2011, May, 2011 and June, 2011. He also paid ₹ 30,25,351/- vide Cheque dated 05.10.2011. Sh. Bhatnagar also paid Rs,10,49,669/- in lieu duty evaded on clearances in March, 2011. 15.5. The whole case is based on the unaccounted production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors from time to time and had to comply with their directions, tells the control exerted by S/Sh. Pawan Jeet Singh and Kamal Jeet Singh in the affairs of the company. At the same time, avoidance of law and non-payment of statutory duty by the persons in charge of complying with the law of the land does not absolve them from penalty as stipulated in the book which is not infructuous and perfectly suits the situation here. Some more citations favoring Revenue: Bajrang Petrolchemicals (P) Ltd. Vs. CCE, Kanpur - [ 2015 (317) ELT 243 All]. Collector Vs. D. Bhoormal - [1983 (13) ELT 1546 SC] Shiv Shakti Steel Tubes Vs. Commissioner - [2008 (227) ELT A 122 (SC)] Fathima Panels Vs. CCE, Mangalore - [2014 (213) ELT 641 (Tri. Bangalore) 16. In rejoinder the learned advocate submitted that the judgement in Shiv Shakti Steel Tubes stands distinguished by the Hon'ble High Court in the case of CCE Vs Saron Mechanical Works Pvt. Ltd. reported in 2016 (332) ELT 80 (P&H). He also submitted that law laid down in Bajrang Petro Chemicals (P) Ltd., case is no more a good law in view of contrary judgement of the same High Court in the case of Continental Cement Company Vs UOI reported in 2014 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also does not throw any light on the process adopted by the officers for physical verification of the stock. The final product in the present case is accounted for in weight. Therefore, the method for verification of stock of such goods must be the physical weighment of goods. Any other method of ascertaining quantity of such goods will be estimation only. We have also gone through the statement recorded by the officers and we find no mention of the method of physical verification. Nor any calculation chart is made part of panchnama. Thus, we agree with the appellant that verification of stock was by eye estimation only. More over there is no dispute to the fact stated by the appellant company in their reply, that the shortage in case of MS Ingots was 3.24 % and that of TMT bars was 1.4 % of the total production. Such difference in quantity is normal in case of eye estimation of the stock. Therefore, we hold that the allegation of clandestine removal on the basis of the so called shortage in stock of final products is un-sustainable and demand in this regard is fit to be set aside. (ii) Demand based on figures/data in computer printout/loose slips The computer printout and loose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The conditions referred to in sub-section (1) in respect of "2. the computer print-out shall be the following, namely:- (a) the computer print-out containing the statement was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer; (b) during the said period, there was regularly supplied to the computer in the ordinary course of the said activities, information of the kind contained in the statement of the kind from which the information so contained is derived; (c) throughout the material part of the said period, the computer was operation properly or, if not, then any respect in which it was not operating properly or was out of operation during that part of that period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities." 19. Ld. Sr. Counsel has argued that the above me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peripherals and requested for obtaining the information or data from those peripherals, some floppies were found blank while some even could not run on the computer. The hard disc even could not be opened for the reason best known to the Department as all these peripherals remained in their custody after the date of seizure i.e. 30-7-1999. 21. In view of the above orders, there can be no doubt that computer printout can be taken in evidence only if the parameters stipulated in section 35 B (2) of the Central Excise Act 1944 are fulfilled. In the present case, we are unable to find any evidence on record to show that the parameters have been fulfilled. In addition there is no corroborative evidence to prove correctness of the data/figure in the computer printout. Under the circumstances, we are of the view that it is not proper to take computer printout in evidence in the present case for holding appellant company guilty of suppression of production and clandestine removal of goods. 22. As regard demand on the basis of figures in the loose slips, it is admitted that the loose slips were found in the guest house and not in the factory premises. On perusal of the panchnama at page 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided by this Tribunal in the case of R.A. Castings Pvt. Ltd. Vs CCE reported in 2009 (237) ELT 674 (Tri.). The Tribunal's decision was affirmed by the Hon'ble High Court in the case of CCE Vs R.A. Casting Pvt. Ltd. reported in 2011 (269) ELT 337 (All.) which stands maintained by the Hon'ble Supreme Court as reported in 2011 (269) ELT A108 (S.C) by way of dismissal of SLP filed by the department against the said judgment of Hon'ble Allahabad High Court. Thus the issue is finally settled in favour of the assessee. The learned Commissioner has not taken cognizance of the Hon'ble Allahabad High Court judgment and has erroneously distinguished this Tribunal's order in the case of R.A. Casting Ltd. [Supra]. As a matter of fact, the demand in this case is also based on theoretical calculation taking into account the unauthenticated and uncorroborated figures of production as actual production. Once the allegation of suppression of production and clandestine removal of alleged unaccounted production is proved to be incorrect, the production calculated on the basis of such production figure must be treated as in correct and wrong. Under the circumstances demand of duty on the basis of avera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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