2002 (12) TMI 481 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty for alleged clandestine removal of goods.
2. Validity of the impugned order setting aside duty demand and penalty.
3. Evidence required to establish clandestine removal.
4. Legal principles regarding proving clandestine removal.

Analysis:

Issue 1:
The appeal was filed by the Revenue against the Order-in-Appeal modifying the duty demand and penalty for alleged clandestine removal of goods. The officers found irregularities during stock taking, leading to the suspicion of clandestine removal.

Issue 2:
The Commissioner (Appeals) set aside the duty demand and penalty related to clandestine removal but upheld confiscation and penalty for shortages found during physical verification. The Revenue challenged the validity of this order.

Issue 3:
The Revenue contended that there was ample evidence to prove clandestine removal, citing irregularities in stock and production records. However, the Commissioner (Appeals) disagreed, stating that the charge must be substantiated with convincing evidence, not presumptions.

Issue 4:
The Tribunal analyzed the evidence presented and legal precedents. It noted that the duty demand was based on cumulative figures without concrete proof of clandestine removal. The Commissioner (Appeals) found discrepancies in the calculation method used by the adjudicating authority.

The Tribunal emphasized the necessity of substantive evidence to establish clandestine removal, as mere presumptions are insufficient. It referenced legal cases emphasizing the burden of proof on the department and the need for concrete evidence, not conjectures. The lack of intercepted goods or buyer statements weakened the Revenue's case.

Regarding the confirmed shortage of goods, the Tribunal held that it could not be used to support the allegation of clandestine removal. Upholding the Commissioner (Appeals) decision, the Tribunal dismissed the Revenue's appeal, citing the lack of merit.

In conclusion, the Tribunal upheld the decision to set aside the duty demand and penalty for alleged clandestine removal, emphasizing the importance of concrete evidence in proving such charges.