2007 (3) TMI 629 - AT - Central Excise

Clandestine removal - Evidence - Cross-examination - Demand - Non-accountal of goods - Burden of proof

Summary

Issues:
1. Allegation of clandestine removal of 3.5 MT iron and steel products.
2. Allegation of unaccounted excess stock of 486.845 MT.

Analysis:

Issue 1: Allegation of Clandestine Removal
The Appellant challenged the order upholding the allegation of clandestine removal of 3.5 MT iron and steel products. The Lower Appellate Authority found that the Appellant's sister concern issued a challan to escape scrutiny, abetting the offense. The Appellant argued that the findings were baseless without evidence and that the purchase was genuine. The Appellant contended that the excess stock was estimated arbitrarily without proper basis. The Appellate Tribunal noted the lack of evidence connecting the Appellant and the sister concern. The matter was remanded for further examination and cross-examination to establish the alleged clandestine removal.

Issue 2: Allegation of Unaccounted Excess Stock
Regarding the allegation of unaccounted excess stock of 486.845 MT, the Appellant failed to provide convincing evidence or explanation to prove the stock's legitimacy. The Revenue demonstrated the excess quantity through excise records and physical inspection. The Tribunal confirmed the demand for the excess stock value. The duty liability and penalty amount were to be re-determined by the Appellate Authority. The appeal was partly allowed, remanding the matter for further assessment by the Commissioner (Appeals).

In conclusion, the judgment addressed the allegations of clandestine removal and unaccounted excess stock. It highlighted the importance of evidence and cross-examination in establishing connections and proving the legitimacy of transactions. The decision emphasized the need for thorough examination and proper documentation to determine duty liability and penalties accurately.