2010 (8) TMI 902 - AT - Central Excise

Summary

Issues: Allegations of clandestine removal of goods without payment of duty, confirmation of demand, imposition of penalty, confiscation of goods.

In this case, the Appellate Tribunal CESTAT AHMEDABAD heard appeals arising from an impugned order confirming a duty amount against a company engaged in the manufacture of chewing tobacco and pan masala. The company, M/s. Chetna Zarda Co., was alleged to have engaged in clandestine removal of goods, leading to the confirmation of duty, interest, and penalties. The goods were cleared to a distributor, M/s. Kripa Tobacco Marketing, who further distributed them to dealers and retailers. During investigations, incriminating documents were found at the premises of dealers, indicating cash sales without proper documentation. Statements from various individuals, including representatives of the distributors and the company, were recorded. The Revenue's case relied heavily on these statements, alleging that goods were cleared without payment of duty. However, statements from the distributors and the company clarified that all goods were cleared with payment of duty under invoices. The Tribunal emphasized the need for direct and positive evidence to establish charges of clandestine removal, which were lacking in this case. As a result, the Tribunal allowed the appeal of M/s. Chetna Zarda Co., setting aside the demand of duty and penalties.

Moreover, since the appeal of M/s. Chetna Zarda Co. was allowed, the confiscation of goods from dealers' premises and penalties imposed on them were also set aside. The Tribunal highlighted the importance of concrete evidence in proving allegations of clandestine activities and emphasized that charges cannot be upheld based on uncertainties or doubts. Ultimately, all appeals were allowed, and the impugned orders were overturned, providing relief to the appellants.