2012 (2) TMI 417 - AT - Central Excise

Clandestine removal of goods - Detention of trucks loaded with M.S. Rod of M/s. J.M.D. weighing 15 MT and 14.99 MT - Held that - there are three similar statements have been deposed by the both drivers which were contradictory to each other. I find that their second interrogatory statement is in complete contradiction of their first interrogatory statement and their third interrogatory statement is a complete contradiction of their second interrogatory statement. Undoubtedly the statement made U/s 14 of the Central Excise Act, 1944, has an evidentiary value, but if there is any contradiction among them, it needs further corroboration. The lower adjudicating authority has wrongly considered and appreciated the statement, dated 1-8-2008 of drivers, who deviated from their previous statement. Merely gross resemblance in distance and time taken in travelling to reach the loading place would not be incriminatory fact in absence of its specific and tangible corroboration. Non-production of duty-paying document is not at all incriminatory fact on their part. Hence I hold that seized 29.99 MT MS bars is not liable for confiscation nor trader and its proprietor are liable for penalty U/s 11AC of the C. Ex. Act, 1944 read with Rule 25 & 26 of the Central Excise Rules. Moreover, in view of the discussion as above, as Demand of Central Excise Duty upon seized 29.99 NT MS bars has been found to be unsustainable, the appeals of M/s. Durga Rai Vijay Kumar of Samaur Bazar (UP) and its proprietor succeeds on merit. Hence technical issues, like time bar and jurisdiction of demand notice not being discussed. When the core issue of clandestine removal from JMD factory is not established, the question of confiscation of goods and imposition & penalty on the appellants does not arise. Where allegation of violation of Central Excise Act is not established, then subsequent imposition of fine or penalty or confiscation of goods is of no consequence. Invocation of Sec. 11AC of Central Excise Act is not sustainable in law if allegation of fraud, suppression of facts and misstatement are not proved to the contrary - Department could not produce any evidence contrary - Decided against Revenue.

Summary

Issues Involved:
Revenue's appeal against order setting aside adjudicating authority's decision.

Detailed Analysis:

1. Facts of the Case:
The case involved the inspection of two trucks loaded with M.S. Rod, leading to seizure and proceedings against multiple parties. The lower adjudicating authority confirmed the proceedings, which were challenged by the respondent before the Commissioner (Appeal). The Commissioner set aside the lower authority's order, prompting the Revenue's appeal.

2. Argument by Revenue:
The Revenue argued that the Commissioner did not consider crucial statements by drivers and overlooked toll tax payments. They contended that certain facts, such as embossed bars and specific consignments, were not taken into account. Additionally, discrepancies in statements were highlighted to support the Revenue's case.

3. Judgment on First Issue:
The Commissioner analyzed contradictory statements by drivers and the proprietor of the trading firm. It was noted that lack of corroboration and evidence undermined the case against the appellants. The Tribunal emphasized the need for substantial evidence and dismissed assumptions without concrete proof.

4. Judgment on Second Issue:
Regarding the consignment of MS bars, the Tribunal examined the trader's statements and purchase invoices. The Tribunal found no grounds to question the legitimacy of the transactions, emphasizing that goods under proper invoices are deemed duty paid. Allegations of clandestine removal were refuted based on the evidence presented.

5. Judgment on Third Issue:
The Tribunal ruled that the non-production of duty-paying documents did not incriminate the appellants, leading to the conclusion that the seized goods were not liable for confiscation or penalties. The lack of evidence supporting the central allegation of clandestine removal led to the dismissal of fines and penalties against the appellants.

6. Final Decision:
The Tribunal upheld the Commissioner's order, noting that all aspects raised by the Revenue were duly considered. With no contradictory evidence presented by the Department, the Commissioner's decision was upheld, and the appeals were dismissed. The judgment emphasized the importance of concrete evidence and the lack of sustainable allegations in the case.

In conclusion, the Tribunal's detailed analysis and dismissal of the Revenue's appeal underscored the necessity of substantial evidence and the failure to establish allegations of clandestine removal, leading to the rejection of penalties and confiscation.