2007 (7) TMI 59 - AT - Central Excise

Clandestine Removal Alleged that appellant is the clandestine removal of goods on the basis of information provided by the informer Held that allegation was not correct and set aside

Summary

Issues:
1. Duty demand and penalty confirmation in respect of 23 consignments.
2. Allegations of clandestine removal of goods based on fake invoices.
3. Standard of proof required in departmental proceedings.
4. Reliability of evidence and witness statements.
5. Burden of proof on the Revenue.
6. Analysis of evidence and lack of corroborative proof for alleged clandestine activities.

Detailed Analysis:
1. The Revenue appealed against the order vacating duty demand for 23 consignments and confirming it for one consignment. The case involved fake invoices allegedly generated by a dismissed accountant, leading to duty demand of Rs. 41,212/- and penalties imposed on the company and two directors. The Appellate Commissioner confirmed duty demand for one consignment and reduced the penalty. The appeal raised questions on the evidence of clandestine removal of goods.

2. The Revenue contended that the Directors' admissions, accountant's statements, and octroi receipt corroborated clandestine activities. They argued that circumstantial evidence was sufficient in departmental proceedings, citing relevant case law. The respondent's representative disputed the reliability of the dismissed accountant's statement and highlighted lack of support from buyers and transporters named in the fake invoices.

3. The standard of proof required in Revenue proceedings was debated, emphasizing the preponderance of probabilities over proof beyond reasonable doubt. The judgment clarified that legal proof need not be perfect but based on a prudent assessment of probabilities. The burden of proof on the Revenue was discussed in light of the principles governing the onus in such cases.

4. The dismissal of the accountant raised doubts about the credibility of his statements, especially when he failed to appear for cross-examination. Lack of independent corroboration for clandestine removal of goods under the fake invoices undermined the Revenue's case. The absence of reliable sources for the invoices and denial of receipt by buyers and transporters weakened the allegations.

5. The analysis highlighted discrepancies in the evidence presented by the Revenue, emphasizing the lack of concrete proof for the alleged clandestine activities. The judgment emphasized the importance of corroborative evidence and the failure to establish the authenticity of the fake invoices and the removal of goods under them.

In conclusion, the Appellate Tribunal dismissed the Revenue's appeal due to insufficient evidence and lack of credibility in proving the clandestine removal of goods under the disputed invoices. The judgment underscored the importance of reliable evidence and the standard of proof required in departmental proceedings, ultimately upholding the order reducing duty demand and penalty for the respondent.