Jai Mangla Sponge Iron Private Limited Vs Commissioner of C.G.S.T. and C.X. (CESTAT Kolkata)
Summary: CESTAT Kolkata set aside the Central Excise duty demand of Rs.4,34,56,993/- against M/s Jai Mangla Sponge Iron Pvt. Ltd., the equivalent penalty imposed on the company and the Rs.50 lakh personal penalty imposed on its Director, holding that the Revenue failed to establish the alleged clandestine manufacture and removal through legally admissible and corroborated evidence. The dispute concerned alleged clandestine clearance of 16,639.630 MT of Sponge Iron and 15,873.090 MT of Charcoal during 01.11.2014 to 07.09.2016. The Department principally relied upon data/documents retrieved from seized CPUs, computers and pen drives and statements recorded from employees during investigation.
The Tribunal identified two principal evidentiary issues: whether statements recorded during investigation were admissible without compliance with Section 9D of the Central Excise Act, 1944, and whether data retrieved from CPUs and pen drives could be admitted without satisfying Section 36B. It held that statements relied upon by Revenue had never been tested through examination-in-chief or cross-examination and, therefore, could not be relied upon without following the mandatory Section 9D procedure. The Tribunal relied, inter alia, upon M/s Ambika International v. Union of India [2018 (361) E.L.T. 90 (P&H)] and its earlier decision in M/s Jai Balaji Industries Limited & ors. v. Commissioner of C.G.S.T. and Central Excise, Bolpur [2023 (8) TMI 989 – CESTAT, Kolkata].
