The CESTAT, Chandigarh in Mahalaxmi Distilleries v. CCE, Rohtak, held that the data retrieved from the laptop of the Chartered Accountant (CA) cannot be a sole basis for demand against the assesse especially when an opportunity to cross examination was not granted to the assesse.
In the instant case, the department raised demand from the assesse, a manufacture of packaged drinking water, on ground of not paying duty and clearing goods clandestinely. The demand was solely based on the statement given by the appellant and the data retrieved from the Laptop of the Chartered Accountant of the Assessee.
Before the CESTAT, the appellants contended that the department has not followed the procedure under Section 36B of the Central Excise Act, 1944. Further, the statements were recorded under duress and on the basis of the statements and documents recorded from third party. It was therefore, contended that the demand cannot be confirmed without any corroborative evidence.
Supporting their contentions, the appellants relied on the decisions in Modern Laboratories Vs. CCE, Indore, Shivam Steel Corporation, CCE, Raipur Vs. Shree Harekrishna Sponge pvt. Ltd.
On behalf of the department, it was contended that the existence of these documents have not been denied by M/s IFL and M/s IAPL and the appellants themselves have admitted that these goods (packing material) have been supplied to the appellants without payment of duty and the appellants have also not shown the same recorded in their record.
After hearing both sides, the Judicial Member of the Tribunal came to a conclusion that the impugned order is not sustainable since it was solely based on the evidences collected from the Chartered Accountant.
Shri. Ashok Jindal, the Judicial Member noted that no investigation was conducted at the end of the appellants and the transporters were also not investigated to reveal the truth whether the clandestine removal of goods from M/s IFL and M/s IAPL were transported up to the place of appellants. Moreover, no cross examination of the persons whose statement was relied upon and sought by the appellant was granted.
In view of the decision of Jindal Drugs Pvt. Ltd, the Tribunal held that there is violation of the principles of natural justice since no cross examination was granted to the Assessee.
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