2004 (3) TMI 564 - AT - Central Excise

Summary

Issues: Allegation of clandestine removal based on discrepancy between excise records and balance sheet.

In this case, the appellant, a manufacturer of Texturised Synthetic Yarn, was alleged to have engaged in clandestine removal of goods based on a significant discrepancy between the clearances of their product in the excise records and the balance sheet for the relevant year. The Commissioner (Appeals) confirmed the duty demanded by the lower authority, leading to the appellant filing an appeal. The main issue before the Tribunal was whether the allegation of clandestine removal could be sustained given the discrepancy in the records. The Tribunal noted that the discrepancy raised an initial presumption against the appellant, shifting the burden onto them to prove that the goods were not removed without payment of duty. Despite the lack of direct evidence of clandestine removal, the appellant's failure to provide any explanation or attend the hearings led the Tribunal to conclude that their silence was detrimental to their case. The Tribunal emphasized that had the appellant explained the reasons behind the discrepancy, the burden of proof would have shifted back to the department. However, the appellant's silence was considered fatal to their defense, ultimately resulting in the rejection of the appeal.

The judgment highlights the importance of active participation and providing explanations in response to allegations of clandestine activities. It underscores that mere discrepancies in records can lead to adverse presumptions against the party involved, necessitating a proactive approach in presenting evidence and arguments to counter such allegations. The Tribunal's decision serves as a cautionary tale regarding the consequences of remaining silent in the face of serious accusations, emphasizing the need for full cooperation and engagement in legal proceedings to effectively defend against such charges.