2011 (3) TMI 1301 - HC - Central Excise

Demand - Clandestine removal - Classification - Held that - Tribunal on analyzing the materials came to the conclusion that the author of the Slip was not examined and there were no materials barring the statement of Liaison Officer and the Security Assistant who had nothing to do with the production and clearance - no purpose in remanding the case back for fresh adjudication as had been sought for by the Revenue - no Substantial question arises.

Summary

Issues:
Admission of Civil Miscellaneous Appeals based on substantial question of law regarding clandestine removal of cotton yarn.

Analysis:
The judgment pertains to the admission of Civil Miscellaneous Appeals concerning the clandestine removal of cotton yarn. The primary issue revolves around whether the findings of the CESTAT in the impugned Final Order are perverse, given the established clandestine removal of cotton yarn. The appellant conducted a surprise inspection and seized a file containing despatch details of cotton yarn in cone/cheese and hank form, revealing evasion of central excise duty. A show cause notice was issued, leading to the demand for excise duty, penalty imposition, and interest payment. The Commissioner of Central Excise observed discrepancies in the investigation, highlighting insufficient examination of buyers and key personnel, lack of corroborative evidence, and absence of author statements from slips used for assessment.

The Appellate Assistant Commissioner noted the failure to consider cross-examination requests and non-enquiry of crucial individuals like the Factory Manager. The Commissioner concurred with the assessee's argument, emphasizing the lack of admission or evidence to support the allegations. Subsequently, the Revenue appealed to the Tribunal, which highlighted the absence of questioning responsible persons from the assessee's establishment and the unreliability of retracted buyer statements. The Tribunal upheld the Commissioner's decision, rejecting the Revenue's appeal and penalty restoration due to insufficient evidence and lack of material to establish clandestine clearance. The Tribunal emphasized the need for concrete evidence rather than assumptions or presumptions.

Ultimately, the Tribunal's analysis concluded that without examining the author of the slips and relying solely on statements unrelated to production and clearance, there was no basis to support the Revenue's case. Consequently, the Tribunal dismissed the Revenue's appeal, leading to the current decision. The High Court, after reviewing the materials and considering the lack of substantial legal questions, dismissed the Civil Miscellaneous Appeals at the admission stage, affirming the Tribunal's decision based on the factual nature of the issues and insufficiency of evidence to warrant further legal scrutiny.