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2024 Supreme(Online)(CESTAT) 557
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Ms. Sulekha Beevi.C.S., Mr. Vasa Seshagiri Rao, JJ
A R Arumugarajan – Appellant
Versus
MADURAI – Respondent
E/40142/2023
Advocates:
Mr. S. Jaikumar & Mr. M. Karthikeyan, Mr. L. Gokulraj, Mr. N. Mariappan
Mr. S. Jaikumar & Mr. M. Karthikeyan, Mr. L. Gokulraj, Mr. N. Mariappan
Electronic evidence must comply with statutory requirements for admissibility; failure to do so renders it inadmissible in proceedings.
Headnote:(A) Central Excise Act, 1944 - Sections 11A(4), 11AA, and 11AC - Demand of differential Central Excise duty confirmed against multiple fireworks manufacturers for undervaluation and non-issuance of invoices - The adjudicating authority relied on electronic evidence from a previous investigation, which was deemed inadmissible due to non-compliance with Section 36B of the Act - The court found that the evidence was not properly authenticated and that the statements of key witnesses were inconsistent and unreliable. (Paras 12.1, 12.20, 13.12)
(B) Evidence - Electronic evidence - The court ruled that electronic evidence must comply with statutory requirements for admissibility, including proper certification and retrieval procedures, which were not followed in this case. (Paras 12.16, 12.19)
(C) Penalties - The court held that penalties imposed based on unreliable evidence and unsupported allegations of undervaluation could not be sustained. (Paras 13.12, 13.16)
Facts of the case:
The case involved multiple fireworks manufacturers accused of undervaluing goods and failing to issue invoices, leading to a demand for differential excise duty based on electronic evidence retrieved from a previous investigation.
Findings of Court:
The court found the electronic evidence inadmissible due to lack of compliance with statutory requirements and ruled that the demand for duty and penalties could not be sustained.
Issues: The main issues included the admissibility of electronic evidence from a previous investigation and the reliability of witness statements.
Ratio Decidendi: The court emphasized the necessity of adhering to statutory requirements for the admissibility of electronic evidence and the importance of reliable witness testimony in establishing liability.
Result: Appeals allowed, and the impugned order was set aside.
ORDER
33.1 M/s The Coronation Fireworks Factory [SCN No.04/2O21-C.Ex] i) I confirm the demand of differential Central Excise duty of Rs.1,72,56,579/- (Rupees One crore Seventy Two Lakhs Fifty Six Thousands Five Hundred and Seventy Nine Only) [Rs.1,38,05,263/- in respect of Central Excise Registration Number AAAFT5790QXMOO1 and 34,51,316/- in respect of Central Excise Registration Number AAAFT5790 QXMoo3, (in proportion to their assessable value declared in the ER1 Returns)being central excise duty not paid by M/s The Coronation Fireworks Factory, collected/ received in cash from the dealers/customers towards differential value between the actual transaction/taxable value of the manufactured goods cleared/supplied & lesser/suppressed transaction/taxable values reported in the invoices and value of the manufactured final products supplied/cleared/sold without issuance of invoices under Section 11A(4) of the Central Excise Act 944;
- ii) I confirm the demand of Rs. 10,138/- (Rs.Ten Thousand and One Hundred and thirty eight Only) being central excise duty not paid by M/s The Coronation fireworks Factory on suppressed / short declared in the ER1 Returns filed by them when compared with total value or the invoices issued by them during the period from August 2016to June 2017 under “ Section 11A(4) of the Central Excise Act 1944;
- iii) I confirm demand of interest as applicable on the Central Excise duty amount mentioned at (i) & (ii) above under Section 11AA of the Central Excise Act 1944;
- iv) I impose a penalty of Rs.1,72,66,717/- (Rupees One crore Seventy Two Lakhs Sixty Six Thousands Seven hundred and Seventeen Only), being central excise duty not paid by M/s The Coronation Fireworks Factory collected / received in cash from the dealers/customers towards differential value between the actual transaction/taxable value of the manufactured goods cleared/supplied & lesser/suppressed transaction/ taxable values reported in the invoices and value of the manufactured final products supplied /c1eared/sold without issuance of invoices / short declared in the ER1 Returns filed by them during the period from August zoi6 to June 2017 under Section 11AC of the Central Excise Act 1944. with option to pay penalty equal to 25% of the penalty imposed if the entire amount of excise duty along with interest and reduced penalty is paid within 30 days from the date of receipt of this order;
- v) I order to appropriate the voluntarily discharged amount of Rs. 1,42,26,800/- (Rupees One Crore Forty two Lakhs Twenty six thousands and eight hundreds only) already paid by M/s Coronation Fireworks Factory vide CIN No.20210220183621313056 dated 20.02.2021 against the confirmed demand at para No. 33.1 (i); and vi) Since I have already imposed penalty under Section 11AC of Central Excise Act. 944. I consider that it is not required to impose penalty under Rule 26 & 27 of the Central Excise Rules, 2002 again for the same offence on the company, therefore I drop the penalty proposed under Rule 26 & 27 of the Central Excise Rules, 2002 33.2 M/s Sri Coronation Fireworks Private Limited [SCN N05/2021 C. Ex) i) I confirm the demand of differential Central Excise duty of Rs.1,95,30,192/- (Rupees One Crores Ninety-Five Lakhs Thirty Thousands One Hundred and Ninety Two Only) being central excise duty not paid by M/s Sri Coronation Fireworks Private Limited, collected / received in cash from the dealers/customers towards differential value between the actual transaction/taxable value of the manufactured goods cleared/supplied & lesser/suppressed transaction./taxable values reported in the invoices and value of the manufactured final products supplied /c1cared/sold without issuance of invoices under Section 11A(4) of the Central Excise Act 944;
- ii) I drop the proceedings being central excise duty not paid by M/s Sri Coronation Fireworks Private limited on suppressed / short declared in the ER1 Returns filed by them when compared with total value of the invoices issued by t
