2015 (11) TMI 518 - AT - Central Excise

Clearance of goods without payment of duty - Held that - allegation against the appellant has been made out on the basis of differences of waste shown in ARE 2 and Form IV without any other supportive evidence. The differences in both the figures is explained by the appellant and same has not been considered by both the lower authorities. In these circumstances, allegation of clandestine removal cannot be made on the basis of assumption and presumption. - following the precedent decision in appellant s own case 2015 (1) TMI 168 - CESTAT NEW DELHI - Decided in favour of assessee.

Summary

Issues: Allegation of clandestine removal based on differential wastage figures in ARE-2 and Form IV without supportive evidence.

The judgment revolves around an appeal by M/s. Rhoda Textiles Pvt. Ltd. against an order alleging clearance of goods without duty payment based on discrepancies in wastage figures. The appellant procures fabric duty-free for export, with declared wastage around 4 to 5%. Revenue alleged that the excess wastage reflected in statutory records indicates goods cleared domestically without duty payment. Proceedings were initiated, leading to an order upheld by the Commissioner (Appeals). The appellant argued that the allegation lacked evidence, citing a previous Tribunal decision in their favor. The Revenue reiterated the findings of the impugned order.

The Tribunal examined the case, referencing the appellant's previous favorable ruling where the onus of proving clandestine removal was deemed unfulfilled due to lack of evidence beyond differential wastage figures. The Tribunal highlighted that discrepancies in wastage figures alone cannot support allegations of clandestine removal without additional evidence. In this case, the Tribunal found the allegation solely based on wastage differences between ARE-2 and Form IV, without considering the appellant's explanations. Following the precedent set in the appellant's earlier case, the Tribunal allowed the appeal, emphasizing that clandestine removal allegations cannot stand on assumptions and presumptions alone.

The judgment underscores the importance of concrete evidence in proving allegations of clandestine removal. It establishes that mere differences in wastage figures between statutory records are insufficient to support such serious accusations without additional corroborative proof. The Tribunal's decision emphasizes the need for a robust evidentiary basis to uphold allegations of duty evasion, highlighting the principle that legal conclusions must be grounded in tangible evidence rather than assumptions or presumptions.