2008 (7) TMI 763 - AT - Central Excise

Summary

Issues involved: Alleged clandestine removal of goods without payment of duty based on commercial invoice, non-debiting of duty in Central Excise invoices, lack of corroborative evidence.

Summary:

The case involved an appeal by the Revenue against an order passed by the Commissioner (Appeals) regarding the alleged clandestine removal of goods without payment of duty. The respondents were engaged in manufacturing excisable goods falling under Chapters 29 & 32 of CETA, 1985. Central Excise officers found discrepancies during a visit to the factory, where goods were cleared under a commercial invoice without a Central Excise invoice being issued. The Director of the company admitted to such clearances without duty payment. Subsequently, three Central Excise invoices were found in the factory premises, but the duty involved was not debited, and the invoices were not sent along with the goods. The duty amount was later debited from the Cenvat credit account.

Proceedings were initiated against the appellant, resulting in a demand confirmation and penalty imposition. However, the Commissioner (Appeals) accepted the appellant's explanation regarding the Central Excise invoices, stating they were prepared but goods were not cleared due to quality issues. The Commissioner found no corroborative evidence besides statements to prove clandestine removal. The duty amount not disputed by the assessee was confirmed, and the penalty was upheld. The Revenue appealed this decision.

Upon review, the Appellate Tribunal agreed with the Commissioner (Appeals) that there was a lack of corroborative evidence to support the Revenue's allegations of clandestine removal. The Tribunal accepted the explanation provided by the appellant regarding the Central Excise invoices and the non-clearance of goods due to quality problems. It was noted that mere confessional statements, especially when retracted, were insufficient to prove clandestine removal. The Tribunal found no infirmity in the Commissioner's decision and rejected the Revenue's appeal.

The judgment was pronounced on 23-7-2008.