2014 (6) TMI 652 - AT - Central Excise

Duty evasion - Shortage in stock - Clandestine removal of goods - Held that - The material facts with evidence brought out by investigation as depicted in the preceding paragraphs appears to have force and truth, not being discarded by Respondent. Statements recorded brought out evidence to support the case of investigation. There was neither any hypothesis nor any presumption made by investigation. Investigation made its story of evasion believable bringing out the manner of causing evasion backed by cogent evidence depicted as aforesaid. The electronic record (computer data) proved the modus operandi of the respondent. Fabrication of the records proved evasion of excise duty. This is vividly clear from para 15 of the adjudication order. When the deficiency of stock was found by investigation and that remained unexplained, that is enough to make allegation of unaccounted removal of such goods. No evidence was there to show reason of evacuation of stock - Decided in favour of Revenue.

Summary

Issues involved:
Allegations of duty evasion based on physical verification results and investigation findings.

Analysis:
The judgment pertains to a case where the Revenue alleged duty evasion by the respondent due to a shortage of 1236.240 M.T. of Sponge iron valued at Rs.1,28,56,896/-. The investigation revealed discrepancies in records, such as mismatched vehicle details, party names, and quantities in dispatch advices and invoices, indicating parallel invoicing to evade Central Excise duty. The Dispatch Register also supported the contention of duty evasion through clandestine removal under the cover of parallel invoices. Additionally, the examination of computerized documents and thumb drives revealed unaccounted production of Sponge Iron, further strengthening the case of duty evasion. The respondent failed to provide a satisfactory explanation for the shortage detected during physical verification. The Commissioner (Appeals) erred in disregarding the investigation findings and physical examination report, leading to the Revenue's appeal for restoration of the adjudication order.

The Tribunal found the evidence presented by the investigation to be compelling and truthful, supported by statements and electronic records. The lack of stock explanation, unaccounted production, and discrepancies in records pointed towards a systematic evasion of excise duty by the respondent. The judgment cited legal precedents emphasizing that non-existence of stock is sufficient to infer clandestine removal, highlighting the seriousness of the offense. The Commissioner's sympathetic approach and reliance on flawed reasoning to grant relief to the respondent were criticized, as the evidence clearly indicated a deliberate attempt to evade duty. The Tribunal emphasized that the burden of proof lay with the respondent, who failed to explain the discrepancies and non-accountal of goods, reinforcing the Revenue's case for duty evasion.

Ultimately, the Tribunal allowed the Revenue's appeal, considering the overwhelming evidence and legal principles governing excisable goods' accountability and disposal. The judgment underscored the importance of adhering to statutory provisions and rationale in cases of duty evasion, ensuring that all manufactured goods are properly accounted for and available for inspection as per the law. The Tribunal directed the copy of the order to be forwarded to the concerned authority for further action, concluding the decision in favor of the Revenue.