2007 (1) TMI 345 - AT - Central Excise

Summary

Issues involved: Confirmation of duty demand for clandestine removal and imposition of personal penalty u/s 11AC.

Confirmation of duty demand for clandestine removal:
The appellants were engaged in manufacturing Resin Coated Sand and were visited by Central Excise Officers who found discrepancies in the register maintained by the driver, indicating inward/outward movements not tallying with clearance invoices. Statements of various persons, including the driver and the appellant's accountant, revealed that the register was for tracking goods movement. The appellant also had another unit, M/s. YCP Industries, Belgaum, where similar goods were produced on job work basis for customers like M/s. Saroj Castings. The appellant denied knowledge of the register maintained by the driver, stating it was for the driver's own use. Proceedings were initiated based on the allegations of clandestine manufacture and clearance of resin coated sand.

Legal findings and conclusion:
The revenue's case relied heavily on the register maintained by the driver, which the appellants explained as reflecting raw materials sent for job work and final products dispatched to customers under Central Excise invoices. No concrete evidence of clandestine manufacture was produced besides the register. The Tribunal noted that clandestine removal cannot be established solely based on private records without independent corroboration. The revenue failed to contact customers mentioned in the register or scrutinize records of M/s. YCP Industries to verify the appellants' claims. Citing settled law, the Tribunal held that the burden to prove clandestine removal lies with the revenue, requiring sufficient and concrete evidence. As no valid reason was found to sustain the impugned orders, they were set aside, and the appeal was allowed in favor of the appellants.

*(Separate judgment delivered by Ms. Archana Wadhwa, J.)*