2003 (12) TMI 473 - AT - Central Excise

Proof of Clandestine removal manufacture and removal of the excisable goods - Duty demand - Private records - Prayer for confirmation of dropped amounts and higher penalties - HELD THAT - Issue regarding dropping of the demand The appeal merely pleads to accept the details figuring in the private record without providing any worthwhile counter to the detailed reasoning (extracted above) given by the learned Commissioner in his order on the basis of which he holds that the entries in the said record cannot be relied upon. As outlined above the Commissioner has noted glaring discrepancies in the private record vis-a-vis the entries appearing in the RG-1 to conclude that the seized private record is not reliable. In the appeal it has not been shown as to how these discrepancies are to be overcome to extend credibility to the seized private record. Besides as correctly observed by the Commissioner no other corroboration regarding purchase of extra raw material or disposal of excess finished goods is unearthed. Therefore we hold that the appeals of the Revenue on this point are devoid of merits. We have carefully examined the above grounds and we are unable to subscribe to the postulates to the effect that where there is an evidence of partial evasion conclusion must be drawn to hold that there has been clandestine clearance of 2, 597 M.T. of finished goods as alleged in the show cause notice. This is so because the Commissioner in his order has weighed the entire evidence on record including all the probabilities before discarding the allegation of clandestine clearance. It has been exhaustively brought out in the findings recorded by the Commissioner that mere existence of entries of clandestine production in the seized private record cannot be sufficient evidence to confirm the allegation of evasion. A corroboration is required to support this evidence with other material such as evidence regarding procurement of corresponding raw material for obtaining the finished production allegedly concealed or the evidence regarding the disposal of this excess material. In the Revenue s appeal memorandum no such attempt has been made to demolish the conclusions arrived at by the learned Commissioner. Accordingly we have no hesitation to hold that the appeals filed by the Revenue are without merit and deserve to be rejected. Accordingly we reject the instant appeals filed by the Revenue.

Summary

Issues involved:
Department's appeals against Order-in-Original by Commissioner of Central Excise; Allegations of clandestine manufacture and removal of excisable goods; Confirmation of duty demand and penalties; Dropping of certain demands; Praying for confirmation of dropped amounts and higher penalties.

Details of Judgment:

1. Non-accountal of raw material:
Commissioner confirmed non-accountal of 39.955 MT of raw material, finding no clandestine removal, only technical failure. Revenue disputed acceptance of respondent's version, citing Rule 51A permission absence. However, failure to record raw material doesn't imply evasion. Commissioner held it a technical breach, not penalized respondents. Revenue's appeal lacked corroborative evidence, failed to challenge technical breach.

2. Non-accountal of finished goods:
Allegation of non-accountal of 2,597 MT of goods with duty demand of Rs. 43,77,344 dropped. Private record seized, ownership disclaimed by respondents. Commissioner found private record unreliable, discrepancies with RG-1 entries. Revenue's appeal lacked counter to Commissioner's detailed reasoning, no corroboration on raw material procurement or goods disposal. Appeals devoid of merit, rejected.

3. Clandestine removal of finished goods:
Commissioner confirmed duty demand for certain invoices, dropped rest. Revenue argued evidence of partial evasion should imply clandestine clearance of 2,597 MT. Commissioner considered all evidence, required corroboration for clandestine activity. Revenue's appeal failed to challenge Commissioner's conclusions, lacked evidence demolition. Appeals rejected for lack of merit.

In conclusion, Revenue's appeals against dropping of demands and allegations of clandestine clearance were dismissed by the Appellate Tribunal CESTAT, New Delhi.