2005 (3) TMI 542 - AT - Central Excise

Demand - Clandestine removal of excisable goods without payment of duty - incriminating documents - HELD THAT - The fact that there are discrepancies in the ledger of the broker does not lead to inference that the goods have not been removed from the appellants premises. The appellant wants to prove his innocence on the basis of some factual errors in the ledger of the broker. It is clearly unacceptable. The Revenue is right in holding that in a case of clandestine removal, it is not necessary for the Department to prove its case to the hilt. Incriminating documents, statements recorded and other evidence of shortage of raw materials amply establish that there is clandestine removal in this case. Hence Revenue appeal has to be allowed and the order of the Commissioner (Appeals) should be set aside. Accordingly appeal is allowed while setting aside the order of the Commissioner (Appeals).

Summary

Issues:
Clandestine removal of excisable goods without payment of duty.

Analysis:
The case involves the Revenue appealing against the Commissioner (Appeals) decision to set aside the Joint Commissioner's order confirming duty, penalty, fine, and interest on the illicit removal of excisable goods. The Revenue's main contention is the clandestine removal of goods without duty payment. The officers found discrepancies in the recorded balance of finished goods and inputs at the manufacturing unit. Statements from involved parties indicated sales through a broker on a cash basis. The Joint Commissioner imposed duty, penalty, fine, and interest, which was challenged by the assessee leading to the Commissioner's decision in favor of the assessee.

The assessee raised several contentions challenging the reliability of the evidence presented by the Revenue. They argued discrepancies in the ledger entries of the broker, lack of correlation between invoices and ledger entries, and the interpretation of sales transactions as Sauda without actual materialization. The Commissioner (Appeals) found no acceptable material to prove clandestine removal, citing various legal precedents supporting the burden of proof on the Department in cases of clandestine removal.

The Revenue relied on legal precedents to argue that evidence of clandestine removal can be inferred from circumstantial evidence and incriminating documents found on the premises. They highlighted a partner's statement admitting to clandestine removal and the unretracted nature of the statement. The Revenue contended that discrepancies in the broker's ledger do not negate the evidence of removal. They emphasized that the Department is not required to prove its case with absolute precision in cases of clandestine removal.

The Tribunal upheld the Revenue's appeal, emphasizing the presumption of truth in incriminating documents unless proven otherwise. They rejected the assessee's attempt to prove innocence based on ledger discrepancies and upheld the Revenue's argument of sufficient evidence pointing to clandestine removal. The Tribunal concluded that the Revenue's appeal should be allowed, setting aside the Commissioner (Appeals) decision.

In conclusion, the Tribunal's decision favored the Revenue, highlighting the importance of incriminating documents, statements, and circumstantial evidence in cases of clandestine removal. The burden of proof was shifted to the assessee, and discrepancies in the broker's ledger were deemed insufficient to disprove the clandestine removal of goods.