2007 (8) TMI 607 - AT - Central Excise

Confiscation - Non-accountal of goods - Clandestine removal - Held that - It is well settled that allegations of clandestine removal are required to be proved by production of sufficient evidence and cannot be made on the basis of suspicions - I do not find any positive evidence on record to show clandestine manufacture and removal of the goods - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Confiscation of excess found goods not entered in RG1 register.
2. Allegations of illicit clearance of laminated sheets without payment of duty.

Confiscation of Excess Found Goods:
The case involved the manufacture of paper-based decorative laminated sheets. Central Excise officers found some sheets not entered in the RG1 registers during a visit to the factory. The Commissioner (Appeals) had confiscated 19,664 pieces of sheets not accounted for in the register. However, the Tribunal referred to previous judgments and held that goods still in the factory premises are not liable for confiscation under Rule 173Q. The Tribunal emphasized that there was no evidence of an attempt to clear the goods without paying duty. As a result, the confiscation was set aside, and a cash security of Rs. 5,80,000 was also revoked.

Allegations of Illicit Clearance:
Regarding the allegation of illicit clearance of 20,223 sheets, the appellate authority found no corroborative evidence to substantiate the claim. The appellants argued that they had already cleared a significant quantity of sheets on payment of central excise duty. The Commissioner (Appeals) calculated the alleged illicit removal based on flawed assumptions without considering the actual clearances made by the appellants. Citing precedent cases, the Tribunal emphasized that allegations of clandestine removal must be supported by concrete evidence and cannot be based on suspicions alone. As the Revenue failed to provide substantial evidence of clandestine activities, the demand of Rs. 5,69,491 was deemed unsustainable. The Tribunal rejected the appeal by the Revenue, highlighting the lack of positive evidence to support the allegations of clandestine manufacture and removal of goods.

In conclusion, the Tribunal upheld the Commissioner (Appeals)' decision, rejecting the Revenue's appeal on both issues of confiscation of excess found goods and allegations of illicit clearance. The judgment emphasized the importance of concrete evidence in proving allegations of clandestine activities and highlighted the necessity of following established legal principles in such cases.