2002 (1) TMI 1244 - AT - Central Excise

Summary

Issues:
- Confirmation of demand under Rule 173Q of the Central Excise Rules, 1944 against the appellants.
- Allegations of clandestine removal of goods without payment of duty.
- Lack of corroborative evidence to establish clandestine clearance.
- Legal inference from documents and evidence presented.

Confirmation of Demand:
The appeal was filed against the Order-in-Appeal affirming the Order-in-Original confirming a demand of Rs. 4,09,505 with a penalty of Rs. 1,00,000 under Rule 173Q of the Central Excise Rules, 1944. The proceedings were initiated based on a show cause notice alleging a shortage of goods during a factory visit, with the Dy. Commissioner confirming the duty demand and penalty. The Commissioner (Appeals) upheld this decision.

Allegations of Clandestine Removal:
The allegations of clandestine removal were based on a slip found with the gatekeeper and weighment challans from Dayal Dharam Kanta/Dayal Weigh Bridge. However, the evidence presented did not conclusively prove the clandestine removal of goods without payment of duty. The documents did not provide sufficient corroboration regarding the actual removal and sale of goods by the appellants. Statements from the gatekeeper and Executive Director did not clearly establish the clandestine clearance of goods.

Lack of Corroborative Evidence:
The Tribunal emphasized the necessity of tangible evidence to prove the charge of clandestine removal of goods. In this case, the Dharam Kanta slips and weighment challans were deemed insufficient without inquiries from buyers about the receipt of goods. The absence of conclusive evidence regarding the sale of goods and lack of statements from buyers or firms receiving the goods undermined the allegations of clandestine clearance.

Legal Inference from Documents:
The Tribunal referred to a similar case where it was established that Dharam Kanta slips alone cannot prove clandestine removal without further inquiries. The charge of clandestine removal must be supported by cogent and convincing evidence, rather than presumptions. As the evidence presented in this case lacked the necessary corroboration and tangible proof, the impugned order was set aside, and the appeal of the appellants was allowed.

In conclusion, the judgment highlighted the importance of concrete evidence in proving allegations of clandestine removal of goods and emphasized the need for corroborative proof beyond mere documents. The decision to set aside the impugned order was based on the lack of substantial evidence supporting the charges against the appellants.