2007 (9) TMI 100 - AT - Central Excise

Clandestine removal Recovery of delivery challans (carbon copy) showing clearance Appellant admitted that the clearance was made without payment of duty on cash basis in the open market No need of any other evidence to prove clandestine removal Penalty and demand imposable

Summary

Issues:
1. Clandestine removal of goods without raising invoices and payment of duties.
2. Confirmation of demand of duty and imposition of penalties.
3. Appeal against the penalty imposed on the manufacturing unit and the proprietor.
4. Evidence supporting the clandestine removal and imposition of penalties.

Analysis:
The judgment revolves around the clandestine removal of goods by a manufacturing unit without raising Central Excise invoices and without payment of duties. The Central Excise officers discovered the removal during a search, leading to the recovery of delivery challans showing clearance of goods. The proprietor admitted to the clearance of goods in the open market on a cash basis without fulfilling the tax obligations. Subsequently, proceedings were initiated to confirm the demand of duty and impose penalties.

The original Adjudicating Authority confirmed the duty demand and imposed penalties on the manufacturing unit and the proprietor. The Commissioner (Appeals) upheld the duty amount but reduced the penalty on the manufacturing unit, considering the duty deposit before the show cause notice issuance. However, the personal penalty on the proprietor was set aside, leading to the present appeal.

The main contention of the appellant was the lack of independent evidence corroborating the clandestine removal besides the delivery challans and statements obtained under pressure. The Tribunal noted that the delivery challans were carbon copies, not rough papers, and found no evidence of duress in the statement. The goods were cleared in the open market for cash, making it challenging for the Revenue to establish clandestine transactions through documentary evidence. Consequently, the Tribunal upheld the logical conclusions of the lower authorities, confirming the duties and maintaining the reduced penalty amount.

In conclusion, the Tribunal rejected the appeal, affirming the duty confirmation and penalty imposition decisions. The judgment highlights the importance of maintaining proper documentation and fulfilling tax obligations to avoid penalties for clandestine activities.