Data Recovered From The Pen Drive Does Not Have Any Evidentiary Value To Prove Clandestine Clearance Of Silico Manganese: CESTAT

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that data recovered from the pen drive does not have any evidentiary value to prove the clandestine clearance of silico manganese.

The bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) has observed that the department has failed to corroborate the unaccounted clearance available in the data retrieved from the pen drive by verification at the customer's end. The data recovered from the pen drive does not have any evidentiary value; the conclusion arrived at by the investigation with one verification cannot be considered corroborative evidence for the clandestine clearance of the entire 3474.950 MT of Silico Manganese alleged to have been cleared through a cash transaction.

The search was conducted by the DGCEI officers at the factory and office premises of the appellant/assessee company. In the course of searching at the Office, one USB drive (a pen drive) was recovered from one of the “Computer Table Drawers,", which was being used by the computer operator.

The pen drive contained a Tally package, which was in locked condition with a username and password. The Tally package was opened with the user ID and password revealed by the computer operator. The data available on the pen drive was for the period from June 2005 to March 2007.

From the data available on the pen drive, printouts of sales registers and purchase registers were obtained in the presence of the computer operator and director. All the printed pages were signed by the computer operator, and certificates were given by him certifying that the retrieved data and printed sales and purchase registers were related to M/s.AAPL.

During the course of the search, the data available on their office computers was also opened and scrutinized. Printouts from the USB drive, pen drive, and computer, when compared with the statutory records, revealed unaccounted production and clearances of 3474.950 M.T. of Silico Manganese. The demand from Central Excise, including Cess, has been raised in the notice based on the data available in the printouts taken from the pen drive.

The assessee contended that pen drive printouts cannot be relevant pieces of material and cannot be admitted into evidence without complying with Sections 36B(2) and 36B(4) of the Central Excise Act. Hence, it cannot be admitted as evidence and cannot be relied upon as evidence. The pen drive is not accompanied by a certificate, as mandated under Section 36B(4).

The tribunal observed that the entire case has been built up on the basis of the data retrieved from the pen drive and the subsequent statements recorded by the responsible persons. Thus, the authenticity of the data is essential to substantiate the allegations.

The tribunal held that the statements recorded in this case have lost their evidentiary value by not following the provisions of Section 9D of the Central Excise Act.

Counsel For Appellant: Kartick Kurmy

Counsel For Respondent: S. Mukhopadhyay

Case Title: Attitude Alloys (P) Ltd. Versus Commissioner of Central Excise, Bhubaneswar-II

Case No.: Excise Appeal Nos. 517-519 of 2011

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