2015 (10) TMI 1641 - AT - Central Excise

Clandestine removal of goods - Imposition of interest and penalty - Held that - In this case allegation of clandestine removal is made against the appellant on the basis of the ledger record of the transporter. In fact when the transporter is transporting the goods, the transporter is required to issue the goods transportation receipt and on the basis of this receipt the ledger account is prepared. Revenue has failed to produce the goods transportation receipt to establish their charge of clandestine removal of the goods by the appellant. In the absence of any corroborative evidence, benefit of doubt goes in favour of the appellant. In these circumstances, I hold that Revenue has failed to prove their case. Therefore, demand confirmed against the appellant is not sustainable. - Decided in favour of assessee.

Summary

Issues:
Appeal against duty demand, interest, and penalty for clandestine removal of goods based on transporter's ledger; Lack of corroborative evidence; Allegation of clandestine removal without incriminating documents or statements; Confirmation of demand by Commissioner (A); Admissibility of penalties on both appellants.

Analysis:
The case involves appeals against an order demanding duty from the appellants for alleged clandestine removal of goods, along with interest and penalties. The investigation was initiated based on discrepancies in the transporter's ledger, showing 15 consignments transported by the appellant, whereas the appellant's records only reflected 13 consignments. However, no incriminating documents or statements were found during the investigation. The main contention raised by the appellant was the lack of corroborative evidence to support the demand based solely on the transporter's ledger.

The appellant argued that the demand was unsustainable as no other records of the transporter were verified to establish the alleged clandestine removal. The appellant emphasized the absence of incriminating documents or further investigations conducted to substantiate the claims. On the contrary, the Revenue contended that the transporter's ledger was sufficient evidence, as the transporter would not falsely record consignments not transported. The Revenue also argued that in cases of clandestine removal, incriminating documents are unlikely to be left behind.

After hearing both parties and considering the submissions, the tribunal analyzed the case. The tribunal noted that the allegation of clandestine removal was solely based on the transporter's ledger, which lacked the essential goods transportation receipts as corroborative evidence. Due to the absence of such crucial evidence, the tribunal ruled in favor of the appellant, granting the benefit of doubt. Consequently, the tribunal held that the Revenue failed to prove their case, rendering the demand unsustainable. As a result, the penalties imposed on both appellants were deemed not imposable.

In conclusion, the appeals were allowed, providing consequential relief if any, as the tribunal found the demand against the appellant not sustainable due to the lack of corroborative evidence supporting the allegation of clandestine removal based on the transporter's ledger alone.