We all know that the investigation proceedings are required to be compiled and documented very precisely as many a times, the entire proceedings get vitiated merely on account of some procedural or technical grounds. In this present update, we wish to discuss the importance of Panchnama in the investigation proceedings.
Panchnama is a document that is prepared during the course of investigation proceedings which records evidences and findings that the officer makes at the scene of offence/crime. The document contains the description of the activities during the course of proceedings and also mentions the details of inventory found during physical verification in case of taxation matters. The document called ‘Panchnama’ is required to be signed by the investigating officer who prepares it and at least two independent and impartial witnesses called ‘Panchas’ and also the concerned party whose proceedings are being convened. As far as witnesses are concerned, they should be respectable and should be in their senses at the time of panchnama proceedings. Only majors are to be taken as witnesses.
In simple words, a panchnama is a record of the things visually perceived or actually experienced by the Panchas in the course of investigation. In case of search proceedings, the panchnama should record everything that takes place in the course of search. If any documents is being seized then it is necessary to record what are the documents recovered from the premises, brief description of the exact place where the documents were located in the premises, and from where they were seized by the seizing officer. It is also necessary to record as to what steps the seizing officer had taken so as to refrain him and persons accompanying him from causing any damage to the documents and also avoid any interference in any manner with such documents and contents thereof. When any documents are seized, it is necessary to enclose the same in a cover and to seal such cover so that the contents of the document cannot be tampered with.
The panchnama should contain the name, age, parentage and address of the panch witnesses, the authority under which the proceedings have been initiated, describing each and every event and article found during investigation, declaration that during the proceedings no damage has been caused to any property or person and religious sentiments of the people are also not hurt.
After discussing about the contents of Panchnama, we now elaborate on the importance of panchnama during the investigation proceedings. It is observed that it is very important that the veracity and authenticity of the panchnama is not doubted as it can lead to declaring the entire investigation proceedings as null and void. It is essential that the copy of panchnama is served to the assessee along with the show cause notice. It is pertinent to place reliance on the decision given by the Hon’ble Delhi Tribunal in the case of SHREE ROHIT SYN FAB (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II [2018 (363) E.L.T. 564 (TRI.-DEL)] wherein it was held that in the absence of panchnama, documents recovered from possession of assessee cannot be relied upon as a piece of evidence. Similarly, in another case, the Hon’ble Chandigarh Tribunal in the case of GOLD PLUS GLASSES INDIA LTD. VERSUS COMMISSIONER OF C.EX., ROHTAK [2018 (363) E.L.T. 381 (TRI.-CHAN.)] it was held that although panchnama was drawn and was signed by the panch witnesses but the panch witnesses filed affidavits saying that they were not part of the proceedings but were only called to sign the panchnama. Consequently, panchnama drawn during the course of investigation had no evidentiary value and demand based on the said panchnama was held as non sustainable. It is also worth mentioning that the panchnama should also record the method prescribed for stock taking and computation sheet of the said stock. In absence of calculation sheet and the methodology adopted for stock verification in panchnama, duty demand was set aside in the case of DAYA SUGAR VERSUS COMMISSIONER OF CENTRAL EXCISE-MEERUT-I [2017 (358) E.L.T. 1006 (TRI.-ALL)].
The above decisions indicate the relevance of panchnama in the investigation proceedings and confirmation of tax demand against the assessee.
This is solely for educational purpose.