Panchnama Not To Be Treated As Certificate Required For Admitting Printouts From Personal Computer As Evidence: CESTAT
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that a panchnama cannot be treated as a certificate required under Section 36B(4) of the Central Excise Act, 1944 for admitting printouts from a personal computer as evidence.
The Bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has observed that “the CPU did not contain the hard disk. The hard disk was in fact picked up from the corner of the room. No attempt was made by the department to admit the hard disk and the pen drive in evidence. The required certificate under section 36B (4) of the Central Excise Act was also not produced. Thus, no reliance can be placed on the printouts”.
Section 11A(4) of the Central Excise Act, 1944 provides that if any duty of excise has not been levied, paid, short-levied, short-paid, or erroneously refunded due to fraud, collusion, willful misstatement, suppression of facts, the Central Excise Officer must, within five years from the relevant date, serve a notice to the person liable, requiring them to show cause for not paying the specified amount, including interest under Section 11-AA and a penalty equivalent to the duty specified.
Section 36B of the Central Excise Act, 1944 states that microfilms, facsimile copies of documents, and computer printouts can be used as evidence and documents.
Section 36B(4) of the Central Excise Act, 1944 provides that a certificate must be provided to admit a computer-generated document as evidence, identifying the document, describing its production method, detailing the device involved, and addressing conditions from sub-section (2).
The Directorate General of Central Excise Intelligence (DGCEI) conducted searches based on intelligence inputs at the factory premises of the assessee. The search resulted in the seizure of various items, including loose slips, hard disks, and pen drives. Printouts were taken from a seized hard disk. A panchnama (a record of the search and seizure) was prepared, detailing the procedures and items seized, including the hard drive and pen drive printouts. A show-cause notice was issued to the assessee, invoking the extended period of limitation under Section 11A(4) of the Central Excise Act, alleging evasion of duty.
The assessee challenged the validity of the proceedings, citing inconsistencies in the panchnamas and a lack of adherence to procedural safeguards during the seizure of documents. However, in its order, the Additional Director General (Adjudication) rejected these contentions, stating that the panchnama clearly described the entire search procedure, including the sealing of electronic gadgets, their recovery locations, and the steps taken to obtain printouts from them. The order passed by the Additional Director General (Adjudication), has been challenged by the assessee before the Tribunal.
The assessee submitted that the Panchnama does not mention the vital details of the recovery of hard disc and pen drives. The conditions stipulated in section 36B of the Central Excise Act have not been observed in recovering the electronic records/documents. The printouts, therefore, could not have been taken into consideration.
The department submitted that the adjudicating authority committed no illegality in relying upon the electronic records. The adjudicating authority has given good and cogent reasons for placing reliance upon the electronic records and the assessee is not justified in contending that the conditions stipulated in section 36B of the Central Excise Act have not been followed.
The Tribunal noted that the Central Excise Act contains a specific provision that describes the manner in which the admissibility of computer print outs will be accepted as evidence in proceedings initiated under the Central Excise Act.
The Tribunal pointed out that CPU did not contain the hard disk. The hard disk was in fact picked up from the corner of the room. No attempt was made by the department to admit the hard disk and the pen drive in evidence. The required certificate under section 36B (4) of the Central Excise Act was also not produced. Thus, no reliance can be placed on the printouts.
The Tribunal observed that the adjudicating authority, on its own, examined the oral evidence on the points required to be stated in the certificate. This is not permissible in law. The confirmation of demand is based only on the printouts taken after connecting the hard disk and the pen drive to the computer.
“It is not possible to accept the contention advanced by the authorized representative appearing for the department that panchnama itself should be treated as a certificate or that the adjudicating authority was justified in itself examining whether the conditions set out in section 36B (4) of the Central Excise Act had been satisfied,” added the bench.
In view of the above, the Tribunal allowed the appeal.
Counsel for Appellant/ Assessee: Nisha Bineesh, Anurag Mishra, Advocates and Sanya Bhatia, C.A.
Counsel for Respondent/ Department: Rakesh Agarwal and Shri Ratnesh Kumar Mishra
Case Title: M/s. Trikoot Iron & Steel Casting Ltd. v. Additional Director General (Adjn.) Directorate General of GST Intelligence (Adjudication Cell)
Case Number: EXCISE APPEAL No. 55779 OF 2023