By TIOL News Service

NEW DELHI , JUNE 01, 2017: THE facts of the case are that the appellants are registered manufacturers of P P medicines and availing the benefit of SSI exemption Notification and also Notification No.108/95-CE. The appellant was supplying the medicines to the State Govt. against purchase order.

On intelligence that the appellant was clandestinely clearing the goods under the cover of parallel invoice without payment of duty, investigation was conducted - statements were recorded and certain documents and CD were seized.

The data from the CD was retrieved on 13.4.2005 and 18.4.2005.

Demand notice came to be issued under the following heads -

A : Clearances made on CE invoices claiming SSI benefit.

B : Clearances made to Kerala Govt. department directly on commercial invoice

C : Clearances made to Kerala Govt. department through A to Z Pharma

D : Details of clearances retrieved from CD on 13.4.2005

E : Details of clearances retrieved from CD on 18.4.2005

F : Clearances made to Tamil Nadu Govt. department directly on commercial invoice.

The adjudicating authority confirmed the demand and imposed penalties and interest.

After considering the submissions made by both sides, the Bench capsulated the various grounds taken in appeal and observed thus -

(a) Clearance made to Kerala and Tamil Nadu Government.

It is a fact on record that supplies made to these government organizations are exempted under Notification No.108/95-CE and to that effect the appellants have produced the certificate from the buyers in terms of the Notification. The case of the Revenue is that the appellants have not supplied the certificate before clearance of the goods, therefore, the demand has been confirmed.

We are not in agreement with the observations made by the adjudicating authority in the light of the decision of the Tribunal in the case of Bajaj Tempo Ltd. = 2003-TIOL-154-CESTAT-DEL wherein it has been held that the certificate produced subsequently is entitled for exemption.

(b) Whether the data retrieved from CD is admissible evidence in terms of section 36(b) of the CEA, 1944?

Data retrieved from the CD can be admissible evidence if it satisfies the provision of section 36(b) of the Act. The said issue has been examined in the Premium Packaging Pvt.Ltd. = 2005-TIOL-61-CESTAT-MAD.

Printouts have been taken in the absence of the appellants and panchnama was drawn. The panchas were not allowed for cross-examination by the appellants and the data retrieved from the CD was never confronted with the appellants during the course of investigation. In that circumstance, we hold that the data retrieved from the CD is not admissible to confirm the demand.

(c) Whether on the basis of data retrieved from the CD without further investigation, the demand can be confirmed against the appellants?

It is held that the data retrieved from the CD is not admissible evidence. Moreover the chart (D & C) is without investigating the data retrieved from the CD which was not confronted with the appellant. No investigation was conducted at the end of the buyer/transporters or the person whose name was mentioned in the data retrieved from the CD. In the absence of any corroborative evidence on the basis of the data retrieved from the CD, the demand is not sustainable. [Arya Fibres Pvt. Ltd. = 2014-TIOL-15-CESTAT-AHM refers]

(d) Whether the statement made by Shri Arun Kheria is admissible?

Merely making statement does not cast liability on the appellant when the appellant is able to produce requisite certificate under Notification No.108/95-CE for clearances made to Kerala and Tamil Nadu Government.

(e) Whether the penalty can be imposed on the appellants?

As the demands are not sustainable, therefore, the question of imposition of penalty on the appellants does not arise.

The appeals were allowed by setting aside the impugned order.

(See 2017-TIOL-1827-CESTAT-DEL)