2016 (3) TMI 1295 - AT - Central Excise

Clandestine removal - absence of tangible evidence to prove that goods removed clandestinely - Held that - Since the Commissioner (Appeals) has recorded the specific findings that clandestine removal of excisable goods has not been proved by the Department with any tangible evidence and allowed the appeal in favour of the respondent I do not find it appropriate to interfere with the said findings in the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues: Allegation of clandestine removal of excisable goods

Analysis:
The case involves an appeal filed by the Revenue against an order passed by the Commissioner (Appeals-I), Central Excise and Customs, Raipur regarding the alleged clandestine removal of excisable goods. The Commissioner (Appeals) disposed of the appeal in favor of the respondent, stating that the allegation of clandestine removal of sponge iron was not sustainable. The impugned order highlighted that the allegation was solely based on entries in the records of traders and transporters, without concrete evidence to confirm the demand of duty and the charge of clandestine removal. The Commissioner (Appeals) emphasized the necessity of tangible evidence such as receipts of raw materials, shortage of raw materials, clandestine manufacturing indicators, and other relevant evidence to establish clandestine removal. The Commissioner (Appeals) concluded that mere entries in records were insufficient to support the allegation of clandestine removal.

The appellate tribunal, in its judgment, upheld the findings of the Commissioner (Appeals) that the Department failed to prove clandestine removal with tangible evidence. The tribunal noted that the specific findings recorded by the Commissioner (Appeals) regarding the lack of concrete evidence to support the allegation were valid. Consequently, the tribunal dismissed the appeal filed by the Revenue, citing a lack of merit in challenging the Commissioner (Appeals)'s decision. The tribunal emphasized the importance of substantial evidence beyond mere entries in records to establish the charge of clandestine removal. The judgment underscores the legal principle that allegations of clandestine removal require concrete proof, such as physical evidence or indicators of clandestine manufacturing, to substantiate the claim.

In summary, the judgment revolves around the issue of clandestine removal of excisable goods and highlights the significance of tangible evidence beyond mere entries in records to support such allegations. Both the Commissioner (Appeals) and the appellate tribunal stressed the essential requirement of concrete proof, such as receipts of raw materials or manufacturing indicators, to establish the charge of clandestine removal conclusively. The decision ultimately favored the respondent, emphasizing the lack of substantial evidence provided by the Revenue to prove the alleged clandestine removal of excisable goods.