2012 (6) TMI 148 - AT - Central Excise

Clandestine removal - absence of corroborating evidence - Held that - First appellate authority while setting aside the demands held that there was no corroborative evidences regarding the clandestine removal of the goods. Even today also, the Revenue is not in a position to putforth corroborative evidence as regards the clandestine removal of the goods, hence, we do not find any infirmity in the said findings - Appeal of Revenue stands rejected.

Summary

Issues:
1. Appeal filed by Revenue against order-in-appeal No.1061/2001/Commr(A)/Raj
2. Rectification of mistake application rejected
3. Appeal filed before High Court
4. Tribunal's omission to consider Department's appeal on merits
5. Setting aside of demand on grounds of clandestine removal
6. Evidence of clandestine removal
7. Corroborative evidence required for charge of clandestine removal
8. Findings of first appellate authority

Analysis:
1. The appeal was filed by the Revenue against order-in-appeal No.1061/2001/Commr(A)/Raj. The appeal was disposed of by the bench along with the appeal filed by the assessee, leading to a subsequent application for rectification of mistake by the Revenue, which was rejected. This rejection prompted the Revenue to file a tax appeal before the High Court, which directed the Tribunal to consider the Department's appeal on merits.

2. The Revenue challenged the setting aside of the demand raised on the assessee under the charge of clandestine removal. The departmental representative argued that there was evidence indicating clandestine removal, specifically pointing to clearances mentioned on letterheads. The submission emphasized the need for the assessee to justify these clearances in central excise records to avoid exceeding the small scale unit limit and consequent liability for central excise duty.

3. The counsel for the assessee countered by highlighting the lack of evidence beyond the mentioned clearances on letterheads to prove clandestine removal. Referring to previous Tribunal decisions, the counsel stressed the necessity for corroborative evidence to substantiate charges of clandestine removal. The absence of such additional evidence was a key point in the defense against the demand raised by the Revenue.

4. Upon detailed consideration, the Tribunal found that the first appellate authority's findings correctly noted the absence of corroborative evidence regarding clandestine removal. The Tribunal observed that the Revenue failed to provide such evidence even during the proceedings, leading to a rejection of the Revenue's appeal. The Tribunal upheld the first appellate authority's decision, emphasizing the importance of corroborative evidence in cases of clandestine removal and concluding that the Revenue's appeal lacked merit.

This comprehensive analysis delves into the issues raised in the legal judgment, outlining the progression of the case, arguments presented by both parties, and the Tribunal's final decision based on the evidence and legal principles involved.