2012 (5) TMI 574 - AT - Central Excise

Clandestine manufacture and removal of goods - scribbling pads - Held that - The handwriting expert s opinion was obtained on the said recovered documents. Admittedly there is no confirmed opinion of the expert. Further, there is no evidence produced by the Revenue indicating any clandestine removal by the appellant. As per various decisions of the Tribunal some of which stands relied upon by Commissioner (Appeals) , findings of clandestine removal cannot be upheld on the basis of private documents, without being corroborated by the independent evidences reflecting upon clandestine removal. In view of the above, I find no reasons to interfere in the impugned order of Commissioner (Appeals). - Decided against Revenue.

Summary

Issues:
- Alleged processing and clearance of grey fabrics without proper record-keeping
- Retraction of statements by individuals involved
- Reliance on handwriting expert's report for authorship confirmation

Analysis:
1. Alleged Processing and Clearance of Grey Fabrics:
The case involved the processing of grey man-made fabrics falling under Chapters 54 and 55 of the Central Excise Tariff Act, 1985 by the respondents. Central Excise officers recovered documents from the office of a partner of the respondents, indicating discrepancies in record-keeping. The original adjudicating authority confirmed a demand of central excise duty against the respondents, which was upheld by the Commissioner (Appeals). However, the Tribunal remanded the matter to the Commissioner (Appeals) for further examination.

2. Retraction of Statements:
Subsequently, during de novo proceedings, the demand was again confirmed by the adjudicating authority. However, the Commissioner (Appeals) set aside the demand order based on the retraction of statements by the individuals involved. The Commissioner referred to a report by the Deputy Government Examiner of Questioned Documents, which did not conclusively establish authorship of the disputed documents. The Commissioner concluded that in the absence of confirmed handwriting expert opinion and other corroborating evidence, the demand could not be upheld against the respondents.

3. Reliance on Handwriting Expert's Report:
The Tribunal noted that the Revenue's case primarily relied on the recovered scribbling pads and notebook, with an opinion sought from a handwriting expert. However, there was no confirmed opinion from the expert, and no additional evidence presented by the Revenue to prove clandestine removal by the appellant. Citing precedent decisions, including those relied upon by the Commissioner (Appeals), the Tribunal held that findings of clandestine removal cannot be solely based on private documents without independent corroborating evidence. Consequently, the Tribunal rejected the Revenue's appeal, upholding the impugned order of the Commissioner (Appeals).

In conclusion, the judgment addressed the issues of alleged processing and clearance of grey fabrics without proper record-keeping, the retraction of statements by involved individuals, and the reliance on a handwriting expert's report for authorship confirmation. The Tribunal emphasized the need for corroborating evidence to support allegations of clandestine removal, highlighting the importance of confirmed expert opinions and independent evidence in such cases.