In a recent case before Customs, Excise and Service Tax Appellate Tribunal of New Delhi the excise duty demand order was quashed due to non-compliance with the requirements specified in Section 36B of the Central Excise Act
The appellant M/s. Trikoot Iron & Steel Casting Ltd. filed an appeal against the Respondent Additional Director General (Adjn.),Directorate General of GST Intelligence (Adjudication Cell), Respondent.
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The Additional Director General passed an order dated 30.06.2021 adjudicating two show cause notices ( SCN ) dated 10.02.2015 and 26.12.2015 was assailed in this appeal.
The order of respondent confirmed the demand of central excise duty on Trikoot Iron and Steel Casting Ltd. under section 110 (10) of the Central Excise Act along with payment of interest and penalty under section 11AA and section 11AC of the Central Excise Act respectively. Along with demand of central excise duty on castings articles found short in the factory premises.
The appellant, engaged in the manufacture of MS Girders, Rounds, TMT Bars, MS Ingots, Castings. The Directorate General of Central Excise Intelligence conducted simultaneous searches at the appellants factory premises of appellant and residential premises of Vaibhav Goe, Director of Trikoot Iron & Steel.
During the search some loose slips, hard disks, and pen drives were seized from the residential premises of the Director. During the factory search the officers found shortage of 450.625 MTTMT Bar, 268.340MT Griders and 140.18 MT Casting Articles, having total value of Rs. 7009000/-.
They also found excess of 7.710 MT of End Cuttings, 577.615 MT of Mis Roll and 438.805 MT of MS Ingot, having total value of Rs. 29553250/- in the recorded stock, excluding the quantity of work in progress.The department seized such goods.
The statements of few employees and suppliers were recorded and 2 SCN’s was issued alleging the above stated observations and invoking extended period of limitation under section 11A (4) of the Central Excise Act.
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The appellant submitted his response to the SCN stating there were inconsistencies in the proceedings recorded in the Panchnamas and that they failed to follow safeguards during search.
The appellant’s counsel submitted that it is not necessary to controvert the factual findings regarding the alleged clandestine removal of goods, as the impugned order deserves to be set aside for the sole reason that the provisions of section 36B of the Central Excise Act have not been complied with.
The representatives appearing on behalf of the department supported the impugned order and contended that adjudicating authority did not did not commit illegality upon relying on electronic records.
They also mentioned various decisions of the tribunal in the context of section 36B of the Central Excise Act, stating that a printout generated from the a printout generated from the personal computer that has been seized cannot be admitted in evidence unless the statutory conditions laid down in section 36B of the Central Excise Act are complied with.
The decisions also held that if the data is not stored in the computer but officers take out a printout from the hard disk drive by connecting it to the computer, then a certificate under section 36B of the Central Excise Act is mandatory.
The bench comprising Justice Dilip Gupta and Hemambika R. Priya observed that the Panchnama does not record that Vaibhav Goel was seen removing the hard disk from the CPU and there is nothing on the record to link the hard disk to the CPU or pen drive. Therefore it was clear that CPU did not contain the hard disk.
The department made no attempt to admit the hard disk and pen drive in evidence. The adjudicating authority had on its own examined oral evidence on the points required to be stated in the certificate, which is not permissible in law.
Therefore the contentions of the authorized representative of the authority cant be accepted.
Hence the impugned order passed by adjudicating authority wont sustain, accordingly the appeal was allowed, setting aside the order.
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