2014 (5) TMI 910 - AT - Central Excise

Duty demand - Clandestine removal of goods - whether the goods found stored in the various outside godowns are the goods clandestinely manufactured and cleared by the respondents M/s. Kuber Tobacco Products Pvt. Ltd. and M/s. Kuber Khaini Pvt Ltd. - Held that - Entire case of the revenue is based upon by the recovery of the goods from the godowns, which the present respondent has specifically denied any connection with. The revenue case is that the said goods have been clandestinely manufactured and cleared by the respondents. There is virtually no evidence lending any credence to the said allegation. On the contrary, certain persons have surfaced during investigation and have claimed the ownership of the said goods. In the absence of any evidence showing that the goods in question were manufactured by the respondent and were cleared by them without payment of duty, I find no reasons to disturb the findings of Commissioner (Appeals) inasmuch as Revenue s entire case is based upon assumptions and presumptions - Decided against Revenue.

Summary

Issues:
Whether goods found in outside godowns were clandestinely manufactured and cleared by the respondents.

Analysis:
The judgment delivered by Ms. Archana Wadhwa pertains to an appeal against an order passed by the Commissioner (Appeals) where the revenue challenged the storage of goods in various outside godowns linked to two companies. The central issue revolved around determining if the goods found in these godowns were clandestinely manufactured and cleared by the respondents, M/s. Kuber Tobacco Products Pvt. Ltd. and M/s. Kuber Khaini Pvt Ltd. The godowns were sealed by sales tax officers and contained goods bearing the brand name of the respondents.

During the investigation, statements from various individuals were recorded. The respondents' authorized representative denied ownership of the godowns, suggesting the goods might have been stolen from their manufacturing units and stored there clandestinely. Individuals claiming ownership of the seized goods stated they purchased them from workers in different factories without knowledge of duty payment status.

The revenue contended that the respondents' statements were inconsistent, with one representative implying the goods might have been stolen. However, the judgment highlighted the lack of concrete evidence supporting the revenue's claim that the goods were clandestinely manufactured and cleared by the respondents. The case relied heavily on the recovery of goods from the godowns, which the respondents disassociated themselves from. The judgment emphasized the absence of evidence proving the goods were manufactured and cleared by the respondents without duty payment, leading to the rejection of the revenue's appeals based on assumptions and presumptions.

In conclusion, the judgment dismissed the revenue's appeals, affirming the findings of the Commissioner (Appeals) due to the lack of substantiated evidence linking the respondents to the alleged clandestine activities regarding the stored goods.