2003 (8) TMI 427 - AT - Central Excise

Clandestine removal - Proof - Evidence - Documents - Confiscation and penalty - Imposition of

Summary

Issues:
- Allegations of clandestine removal of goods without payment of duty
- Confiscation of seized goods, duty confirmation, and penalties imposed
- Admissibility of statements and documents as evidence
- Alleged evasion of additional duty of excise
- Validity of the impugned order
- Shortage of fabrics and excess stock found
- Confiscation and penalty imposition based on the type of duty involved

Analysis:
The appeals were filed against a common order-in-original confiscating seized goods, confirming duty, and imposing penalties based on allegations of clandestine removal of goods without duty payment. The appellants, a firm and its partner engaged in textile processing, contested the charges, claiming lack of material evidence and disputing the authenticity of documents provided by transporters. The adjudicating authority upheld the allegations, leading to the appeals.

The appellants argued that there was no substantial evidence supporting the clandestine removal allegations during the specified period. They contended that witness statements and relied-upon documents were inadmissible and insufficient. They highlighted the absence of raw material or finished goods shortage in their factory, challenging the basis for duty confirmation and penalties imposed. Citing a Supreme Court judgment, they claimed that confiscation and penalties were unwarranted for evasion of additional duty only.

On the contrary, the Respondent supported the impugned order, emphasizing the lack of proper invoices for seized goods and detecting fabric shortages in the appellants' factory. The Respondent maintained the validity of the order despite the appellants' objections.

Upon review, the Tribunal found the evidence insufficient to substantiate the duty evasion allegations. The reliance on transporter statements without original documents and lack of corroboration undermined the case. Statements from individuals like Jaya Chandran and Shri Desai were deemed inadmissible as they were not cross-examined. The Tribunal also noted discrepancies regarding fabric shortages and excess stock, with only exempted items involved. Considering the nature of the duty evaded, the Tribunal referenced a Supreme Court precedent to conclude that confiscation and penalties were not applicable.

Ultimately, the Tribunal set aside the impugned order, ruling in favor of the appellants and allowing their appeals with any consequential relief under the law. The decision highlighted the importance of substantial evidence and legal principles in determining duty evasion and penalty imposition.