2009 (10) TMI 549 - HC - Central Excise

Clandestine removal of goods - revenue has to show that there was intentional clandestine removal of goods - no evidence to substantiate clandestine removal of goods - before issuance of show cause notice the amount of duty was paid Held that - no evidence worth the name has been discussed or placed before us to show that there was intentional clandestine removal of goods.

Summary

Issues:
- Dismissal of claim by the appellant department primarily on two grounds: duty payment before show cause notice and lack of evidence for clandestine removal of goods.

Analysis:
The judgment concerns the dismissal of appeals filed under Section 35-G of the Central Excise Act, 1944 against a Final Order passed by the Customs, Excise and Service Tax Appellate Tribunal. The Tribunal dismissed the claim made by the appellant department based on two primary grounds. Firstly, it was held that the mere deposit of duty before the issuance of a show cause notice may not be sufficient to prevent the revenue from invoking penal provisions. Secondly, there was a lack of evidence to substantiate the alleged clandestine removal of goods. The High Court emphasized the necessity for the revenue to demonstrate intentional clandestine removal of goods to invoke penal provisions effectively.

Upon reviewing the orders passed by the Tribunal, the Commissioner, and the order-in-original, the High Court found that no substantial evidence had been presented to establish intentional clandestine removal of goods or the respondent's awareness of such actions. The order-in-original merely recorded conclusions without providing concrete evidence to support the claim of intentional evasion of Central Excise duty. The High Court reiterated the principle that if the Tribunal has taken a particular view based on facts, the High Court should not engage in re-evaluating evidence. Additionally, the absence of evidence indicating an intention to evade duty in accordance with Rule 26 of the Central Excise Rules, 2002 further weakened the appellant's case.

In conclusion, the High Court found no merit in the appeals, leading to their dismissal. The judgment underscores the importance of substantial evidence to support claims of intentional evasion of duty and highlights the significance of adhering to legal provisions and rules governing excise duties to warrant successful appeals in such cases.