Order date – 26 September 2022

Facts – 

• The appellant, M/s U.P. Bone Mills (P) Ltd. and ors., were alleged to be manufacturing and removing excisable goods without paying central excise duty.
• Based on this intelligence, the premises of the appellant were searched on 08.10.2013 and a Panchnama was drawn. The stock of the goods i.e. MS Ingots in the factory were taken and compared with the stock as per the records. It was found that there was a shortage of M.T. of Ingots.
• On 25.05.2016 officers opened the sealed envelope in which the Pen drive was present under a Panchnama in the presence of two witnesses and a copy of the files in the Pen drive were printed in the computer of the department. 
• Based on the information collected from the Pen drive and also various documents which were resumed during the search and investigation, a show cause notice was issued to the appellants which culminated in the impugned order.
• Aggrieved, the appellant filed an appeal.

Issue – 

• Whether the demand could have been confirmed on the basis of information extracted from the Pen drive which was obtained without following procedure prescribed under Section 36B of the Central Excise Act?

Order – 

• The Tribunal observed that since the mandatory requirement under Section 36B of the Central Excise Act was not followed, the Pen drive cannot be taken as evidence, the Original Authority should be given an opportunity to examine the demands in respect of the other documents resumed de-hors the data derived from the Pen drive and determine, whether any duty liability can be sustained.
• Therefore they set aside the impugned order and remanded the matter to the Adjudicating Authority to decide the matter afresh ignoring the evidence in the Pen drive.
• Appeal allowed by way of remand.