2007 (6) TMI 465 - AT - Central Excise

Summary

Issues: Allegation of clandestine removal of cigarettes, Appeal against Order-in-Appeal No. 6/2005 Central Excise

The appeal before the Appellate Tribunal CESTAT, Bangalore stemmed from the Order-in-Appeal No. 6/2005 Central Excise, where the Revenue confirmed a demand of Rs. 41,221 for 36,762 Nos. of cigarettes allegedly removed clandestinely. The appellant had reported the theft of the cigarettes through an FIR, and the Revenue considered this theft as clandestine removal. The appellant argued that since the factory was under the physical control of the Department and the theft was reported, the allegation of clandestine removal was baseless. The Tribunal had previously ruled in Final Order No. 1205/2006 that goods removed for testing purposes cannot be deemed clandestinely removed, which supported the appellant's case. Additionally, the Department failed to prove the clandestine removal of goods without payment of duty. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

The learned Counsel representing the appellant emphasized that the FIR regarding the theft of cigarettes was filed and shared with the Department, negating the possibility of clandestine removal. The physical control of the factory by the Department further supported the appellant's argument against the allegation of clandestine removal. The Tribunal's previous ruling on goods removed for testing purposes and the Department's failure to meet the burden of proof regarding duty payment further strengthened the appellant's case. Ultimately, the impugned order was deemed improper and set aside, allowing the appeal with any necessary relief.