2008 (8) TMI 609 - AT - Central Excise

Demand - Clandestine manufacture and removal of texturised fabrics - evidence - Held that - there is no evidence on record to show clandestine manufacture and clearance of the goods. Such cases are required to be established beyond doubt on the basis of concrete and positive evidences - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confirmation of demand based on clandestine removal of texturised fabrics.
2. Reliability of statements and input-output ratio as evidence for clandestine removal.
3. Requirement of concrete and positive evidence for establishing clandestine manufacture and clearance.

Analysis:

1. The judgment addresses the confirmation of demand against the appellants concerning the clandestine removal of texturised fabrics. The Revenue alleged that the appellants should have shown excess production of fabric based on the consumption of raw materials like POY and Anti-static oil. The duty was confirmed on 5000 kgs. of the final product, although the appellant's Manager's statement during investigations revealed a higher quantity of 14,000 kgs. The final quantity was adjusted to 5000 kgs. The Tribunal found the demand confirmed on the input-output ratio, which was contested by the appellant.

2. The appellant contended that the Manager's statements, not relied upon by the lower authorities due to being proven wrong, should lose their evidentiary value. They argued that clandestine removal cases cannot solely rely on the input-output ratio, citing a Tribunal judgment in a previous case. The Tribunal agreed with the appellant's argument, emphasizing the need for concrete and positive evidence beyond the input-output ratio to establish clandestine manufacture and clearance of goods. The reliance on the Tribunal's previous judgment further supported the appellant's position.

3. The Tribunal concurred with the appellant's contention that apart from the input-output ratio, there was a lack of concrete evidence on record to prove clandestine manufacture and clearance of goods. The judgment emphasized the necessity of establishing such cases beyond doubt with solid and positive evidence. Consequently, the impugned order was set aside, and the appeals were allowed with consequential relief. The decision highlights the importance of robust evidence in cases involving allegations of clandestine activities to ensure a fair and just outcome.