2012 (5) TMI 792 - AT - Central Excise

Summary

Issues involved: Appeal against order in original, confirmation of duty demand, retraction of statement, clandestine removal, evidentiary value of documents, principles of natural justice.

Confirmation of duty demand: The case involved a demand for duty amounting to Rs. 24,70,054/- and penalty based on alleged illicit removal of fabrics from the appellant's factory premises. The appellant contested the show cause notice, but the adjudicating authority confirmed the demands. The Tribunal remanded the matter back to the adjudicating authority, which was challenged by the Revenue in the High Court. The High Court found the Tribunal's order devoid of reasons and remanded the matter back to the Tribunal for decision.

Retraction of statement and evidentiary value: The appellant's counsel argued that the adjudicating authority erred in relying on the retracted statement of the partner of the appellant. The counsel pointed out discrepancies in the investigation, including contradictions in the quantity of fabrics cleared and lack of corroboration in statements of merchant manufacturers. The counsel contended that the case lacked proper investigation and evidentiary value, especially regarding clandestine removal allegations based on private records.

Adjudicating authority's reasoning: The adjudicating authority concluded there was clandestine removal based on recovered documents, partner's statement, and lack of acceptance of retraction. However, the Tribunal found the authority's reasoning flawed. The authority dismissed the retraction as an afterthought without proper consideration. The Tribunal highlighted discrepancies in the quantity of fabrics cleared and lack of correlation between recorded and unrecorded statements of merchant manufacturers.

Decision and remand: The Tribunal set aside the impugned order and remitted the matter to the adjudicating authority for reconsideration. The Tribunal emphasized the need for proper reasoning addressing all raised issues and adherence to principles of natural justice in the reconsideration process.

Conclusion: The appeal was allowed by way of remand, emphasizing the importance of a thorough reconsideration by the adjudicating authority in light of the highlighted discrepancies and lack of evidentiary value in the case.