2011 (6) TMI 410 - AT - Central Excise

Discrepancy of stock - demand confirmed - Held that - There was no difference in stock found by the officers on the date of visit. The authenticity of documents relied upon and the locus standi of the persons who have explained the documents have not been bought out. No admission of unaccounted production and clandestine removal by any of the authorised persons. As no corroborative evidence relied upon in support of entries in the private records sought to be relied upon especially when their authenticity is in serious doubt appeal of the department rejected - in favour of assessee.

Summary

Issues involved:
Appeal against dropping of demand by original authority based on seized private records and alleged use of fake invoices.

Analysis:
The appeal by the department was against the order of the Commissioner (Appeals) upholding the dropping of the demand of Rs.31,93,380/- by the original authority. The case involved interception of a truck returning to the factory after delivering goods, with suspicion of fake invoices. Private records seized from the factory premises included invoices, octroi receipts, and a notebook. The department alleged discrepancies in the records and suspected the use of parallel invoices for transportation. The original authority doubted the evidentiary value of the seized documents and dropped the demand. The Commissioner (Appeals) upheld this decision.

The department argued that the private records were seized from the factory premises and pointed out discrepancies in vehicle numbers and entries in the records. The respondents, however, supported the decisions of the original authority and the Commissioner (Appeals).

Upon careful consideration, the Tribunal found that while suspicion existed regarding the use of invoices for transportation, suspicion alone could not replace concrete evidence. The private records allegedly maintained by certain individuals lacked credibility as their roles were not clearly established. The Tribunal noted that no evidence was presented to authenticate the entries in the seized documents, and no corroboration was sought from relevant parties like transporters or recipients of goods. The lack of meaningful investigation by the department was highlighted, leading to a failure to gather necessary evidence to support the allegations.

Ultimately, the Tribunal held that the original authority correctly assessed the evidence and dropped the demand, a decision upheld by the Commissioner (Appeals). The department failed to provide valid grounds to challenge the concurrent findings in favor of the assessee. Consequently, the appeal by the department was rejected.