The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the data retrieved from the several computers by the officers of Directorate General of Central Excise Intelligence (DGCEI) is not admissible evidence.
The bench of Justice Dilip Gupta (President) and P. V. Subba Rao (Technical Member) has observed that Simply because an expert has a high profile does not mean that the evidence produced by such an expert cannot be questioned and can be used against anyone without even giving them an opportunity to cross-examine such a person. The Principal Commissioner clearly erred in holding that the officers of Government Examiner of Questioned Documents (GEQD) was not required to be examined or cross examined.
Background
The Directorate General of Central Excise Intelligence, New Delhi searched the premises of one M/s Kamdhenu Ispat Limited and some of its secret locations and recovered an ingot purchase file. It also recovered a pen-drive during searches. The pen-drive was examined by the Government Examiner of Questioned Documents.
The data from the pen-drive was retrieved and based on the data in the pen-drive and the ingot purchase file, its investigation showed that several companies including the assessee herein had supplied ingots clandestinely to Kamdhenu.
The show cause notices were issued to Kamdhenu and the alleged suppliers including the assessee herein proposing to recover duty and impose penalties. Notices were also issued to individuals responsible in the firms.
These proposals were confirmed by the Commissioner by order, against Kamdhenu and also by various orders against others. The Order was passed in respect of the assessee.
The data on the basis of which the allegations of clandestine removal has been confirmed and the duty has been demanded and penalties have been imposed against the assessee are the ingot purchased file of Kamdhenu; the data retrieved from pen-drive and the PCU and Laptop; and the data retrieved by GEQD.
As far as the data retrieved by the GEQD is concerned, it has specifically been recorded in this Tribunal’s order in case of Kamdhenu that the concerned official of GEQD was not examined by the adjudicating authority and, therefore, the matter was remanded directing it to be re-adjudicate after examining the concerned official of GEQD in a personal hearing in the presence of the assessee or its representative for the purpose of arriving at the proper conclusion on the veracity of the data retrieved.
It was also recorded in the first round of litigation that the adjudicating authority had doubted the data and further remarked that the laptops and other devices were possibly manipulated in the office of the DGCEI.
The Commissioner has openly defied the direction of this Tribunal. The reasoning that since GEQD is a premier institute, it is above examination or cross-examination cannot be accepted. Simply because an expert has a high profile does not mean that the evidence produced by such an expert cannot be questioned and can be used against anyone without even giving them an opportunity to cross-examine such a person. The Principal Commissioner clearly erred in holding that the officers of GEQD was not required to be examined or cross examined.
The Commissioner has openly defied the direction of this Tribunal. The reasoning that since GEQD is a premier institute, it is above examination or cross-examination cannot be accepted.
Simply because an expert has a high profile does not mean that the evidence produced by such an expert cannot be questioned and can be used against anyone without even giving them an opportunity to cross-examine such a person.
The Principal Commissioner clearly erred in holding that the officers of GEQD were not required to be examined or cross examined.
Conclusion
The tribunal held that the mandatory procedure prescribed under section 36B of the Central Excise Act was not followed with respect to the data retrieved from the several computers by the officers of DGCEI. Therefore, such data is not admissible as evidence.
The CESTAT held that after excluding the report of GEQD, the data retrieved from the pen-drives by DGCEI and the statements recorded under section 14 of the Excise Act by various persons due to clear non-compliance of the mandatory statutory requirements by the Commissioner, the only RUD left is an ingot purchase file recovered from Kamdhenu, in which the appellant’s name is indicated.
The court held that the sole document is not sufficient to either charge the assessee with clandestine removal or to recover duty from it. Consequently, the confirmation of demand of duty interest and penalty against the assessee as well as the penalty imposed on Prakash cannot be sustained.
Case Title: M/S Shree Balaji Furnaces Pvt. Ltd. Versus Commissioner Of Central Excise & CGST- Alwar
Case No.: Excise Appeal No. 51448 Of 2022
Date: 27/09/2024
Counsel For Appellant: Ajay K. Mishra
Counsel For Respondent: Unmesh Kumar
