2011 (2) TMI 136 - HC - Central Excise

Appeal u/s 35G - Clandestine removal - Amount of ₹ 1,45,000/- cash seized - Penalty - There cannot be any presumption or suspicion for an arbitrarily taxation without any cogent evidence being brought on record - A perusal of impugned orders shows that there is concurrent finding of fact recorded by the Commissioner and the Tribunal that there was nothing to show that the amount of cash seized represented clandestine sale of excisable goods - decided in the favour of the assessee

Summary

Issues:
Interconnected appeals under Section 35G of the Central Excise Act, 1944 regarding confiscation of cash seized on account of sale proceeds of goods removed clandestinely without payment of central excise duty.

Analysis:
1. The issue in this case revolves around the confiscation of cash seized on account of the sale proceeds of goods removed clandestinely without paying central excise duty. The central question raised was whether the exchequer should bear the revenue loss in cases of fraudulent transactions where the modus operandi is admitted by the accused parties. The case involved M/s Paradise Steel Rolling Mills, M/s Patran Pipes Pvt. Ltd., and M/s Ashwani Manoj Kumar, with allegations of unaccounted sale of goods and procurement of iron and steel bars without proper documentation.

2. The Deputy Commissioner, Central Excise initially passed an Order-in-Original confiscating the seized cash amount and imposing penalties on the involved parties. However, on appeal, this order was set aside due to a lack of corroborating evidence and failure to prove the connection between the seized cash and the goods cleared by M/s Paradise Steel Rolling Mills. The appellate authority found the charges to be based on presumption and assumption, leading to the order being deemed not legally sustainable.

3. Upon further appeal by the revenue, the matter was remanded to the Commissioner, who reiterated the earlier order. The subsequent appeal upheld the view that there was no concrete evidence linking the seized cash to the clandestine removal of goods. The appellate authority highlighted the absence of a live link between the parties involved and the lack of evidence showing a direct nexus between the seized money and the alleged fraudulent activities.

4. The High Court observed that there was a concurrent finding of fact by the Commissioner and the Tribunal, indicating that the seized cash did not represent clandestine sale of excisable goods. This finding was deemed not perverse, leading to the dismissal of the appeals. The court concluded that no substantial question of law arose from the case, ultimately upholding the decisions of the lower authorities.

In summary, the judgment focused on the lack of concrete evidence linking the seized cash to the alleged fraudulent activities, leading to the dismissal of the appeals and upholding the decisions of the Commissioner and the Tribunal.