The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the computer printouts which do not fulfil the mandatory provisions of Section 36B-(2) and (4) of the Central Excise Act, cannot be admissible as evidence.
In the instant case, the Central Excise Officer of Indore Commissionerate searched the factory premises of M/s Radiant Containers (P) Ltd. on 08.10.2012, who is engaged in the manufacture of plastic containers (buckets) for various paint manufactures. During the search, the officers seized six computers and one laptop and two hard disc drives were seized from the office premises. Another computer was handed over to the central excise officers by the appellants themselves on 20.10.2012, after completion of the search/panchnama proceedings. The seized computers were cloned and print outs were taken therefrom.
After an investigation, the revenue found that the appellants had indulged in clandestine clearances of huge quantities of the products during the years 2010-11 to 2012-13 and since the unaccounted sale which exceeded Rs.4 Crore each year, the Revenue the benefit of SSI exemption to the appellants and levied penalty and excise duty on them.
The appellants contended that the printouts cannot be relied as evidence since the data retrieval and taking printouts from the seized computers was done behind the back of the appellants and without the presence of any panchas.
The Tribunal found that there are serious irregularities in preparing panchnamas both at the factory premises of the appellants as well as their office on different dates. Apart from the irregularities in the panchnama proceedings there are also inherent contradictions in the manner in which the seized computers were sealed and de-sealed.
“The computer which was handed over by the appellants to the investigating officer on 20.10.2012 was never sealed. We, therefore find that the entire computer data which has been relied upon substantiate the duty demand to be highly unreliable for want of procedural irregularities,” the bench said.
Quashing the order, the bench held that “computer printouts cannot be held to be an admissible evidence unless the conditions as laid in the provisions of Section 36B of the Central Excise Act are fully complied with. A perusal of section 36B would indicate that the Act has prescribed very stringent conditions for computer printouts to be a piece of admissible evidence. The Ld. Counsel for the appellants has invited our attention particular to provisions of Section 36B(2) and (4) of the Central Excise Act.”
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