The Kolkata bench of CESTAT (Customs, Excise and Service Tax Appellate Tribunal) has set aside an order alleging illicit activities against the appellants in connection with clandestine manufacture and clearance of goods in light of the fact that the evidence available on record does not establish the same. The penalty imposed on the appellants were held to be not sustainable in law.
Revenue conducted a simultaneous search at the factory and registered office of the Appellant, M/s Prinik Steels Pvt. Ld, for abetment of the offence. During the search, documents related to the procurement of unaccounted raw materials, suppression of production, clandestine removal of finished goods, receipt of sale proceeds from such clandestine clearances, invoices with undervaluation, parallel invoices, etc.
On the basis of the data recovered during the investigation, a show-cause notice dated 23.05.2008 was issued to the Appellant demanding central excise duty of Rs.9,27,69,569/- including Education Cess, along with interest and penalty. The Notice was adjudicated by the Revenue vide Order-in-Original dated 26.02.2010, wherein the duty demanded in the Notice was confirmed along with interest and an equal amount of duty was also imposed as a penalty under Section 11AC of the Central Excise Act. Penalties were also imposed on Apeelants(s). Aggrieved against the impugned order, all the four Appellants filed the present appeals.
The appellant argued that the entire demand in the Notice has been made based on Sales Register (Computer Printouts) without satisfying conditions of Section 36B(2)/36B(4) of the Central Excise Act, 1944.The appellant(s) contended that the question of veracity of the computer printouts itself cannot be investigated until the procedure for acquisition of the printouts has been thoroughly followed.
The computer printouts taken from the seized computers are not accompanied with Certificate as mandated under section 36B(4) containing the following details: (a) describing the manner in which the data retrieved from the computer(electronic record) was produced (b) the certificate must furnish the particulars of the device involved in the production of that record(the computer used for production of electronic record.
The appellant pointed out that under Section 36B, Computer printouts are not admissible as evidence as conditions under section 36B(2)/36B(4) of Central Excise Act, 1944 are not satisfied. Under Section 36B Computer Printout is “deemed document” admissible in evidence only if conditions thereunder are satisfied. In the present case, no Certificate under section 36B(4) from a person occupying a responsible position in relation to operation of the device is obtained.
Revenue contended that that computer printouts were taken from the seized computer in the presence after following all the due procedure. The details available in the sales ledger were found to be tallying with particulars of sales ledger in all respects. Revenue argued that the various documents seized from the office belonged to Appellants company themself. Revenue pointed out that the Appellant had never disowned the data.
Revenue further contended that they had made all efforts to allow cross examination of all witnesses as sought by the appellants. They prayed for upholding the impugned order.
The two member bench comprising Ashok Jindal, Member(Judicial) and K. Anpazhakan, Member(Technical) held that: “Any admission of clandestine removal as per computerised sale register is not relevant unless conditions of Section 36B are satisfied. Provisions of Section 36B are mandatory in nature. Computer printout/electronic record cannot be proved by oral evidence.” The bench further noted that the admissibility of computer printouts as evidence depends on compliance with Section 65B(2) of the Evidence Act The order was set aside.
The appellant(s) were represented by K. Kurmy, Shri Debayan Dutt & Ms. Ritika Kurky. The respondent was represented by S. Mukhopadhyay
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