2016 (7) TMI 897 - HC - Central Excise

Clandestine removal of goods - tribunal had set aside the demand - Held that - it is evident that the Tribunal has discussed the evidence on record in detail and has based its conclusions upon findings of fact recorded by it upon appreciation of the evidence on record. Having regard to the evidence which has come on record as discussed hereinabove in the opinion of this court it is not possible to state that the findings recorded by the Tribunal are in any manner contrary to the record of the case. Though the learned counsel for the appellant have assailed the impugned order on various grounds they have not been in a position to dislodge the findings of fact recorded by the Tribunal after appreciating the evidence on record. Under the circumstances the view adopted by the Tribunal being a plausible view and the impugned order passed by the Tribunal being in consonance with the evidence on record it cannot be said that the findings recorded by the Tribunal are in any manner perverse. It therefore follows that in the absence of any perversity in the findings of fact recorded by the Tribunal on an appreciation of the evidence on record even if on the same set of facts it was possible for this court to take another view the same would not give rise to a question of law much less a substantial question of law warranting interference. - Decided against the revenue.

Issues Involved:
1. Whether the Tribunal committed a substantial error of law by setting aside the demand of duty, interest, and penalty imposed on the respondent assessee on the grounds that charges were not proved.
2. Whether the Tribunal was justified in holding that the revenue failed to establish the clandestine clearance of goods by the assessee despite the evidence provided by the revenue.

Issue-wise Detailed Analysis:

1. Substantial Error of Law by Tribunal:
The appellant revenue contended that the Tribunal committed a substantial error of law by setting aside the demand of duty, interest, and penalty on the grounds that the charges against the respondent were not proved. The revenue argued that the Tribunal ignored relevant material and evidence placed on record during the adjudication process. The Tribunal was accused of not considering the statements of the proprietor and other significant witnesses, which were never retracted, and thus, allegedly failed to appreciate the evidence in its proper perspective. The Tribunal's findings were challenged as being contrary to the evidence on record, leading to a claim of perversity in the Tribunal's decision.

2. Justification of Tribunal’s Decision on Clandestine Clearance:
The Tribunal's decision was scrutinized for its justification in holding that the revenue failed to establish the clandestine clearance of goods by the assessee. The Tribunal found that the case was primarily based on notebooks seized from an employee's residence and statements from buyers, suppliers, and employees. The Tribunal noted that except for two buyers who confirmed purchases under invoices, other statements were nullified in cross-examination. The Tribunal found no corroborative evidence for the alleged clandestine clearance. It also highlighted the lack of evidence regarding the receipt of raw materials, transportation of finished goods, and money trails. The Tribunal concluded that the revenue failed to establish the clandestine removal of goods, as essential factors like excess raw material usage, transportation, and buyer’s receipt of goods were not substantiated.

Detailed Judgment Analysis:

Findings of the Tribunal:
The Tribunal found that the revenue's case was based on notebooks and statements, but these were not sufficiently corroborated. The Tribunal noted that the statements of buyers and suppliers did not support the revenue's allegations. The Tribunal emphasized the absence of evidence regarding the receipt of major raw materials, transportation of goods, and money trails. It concluded that the revenue failed to establish the clandestine removal of goods by the respondent.

Arguments by the Revenue:
The revenue argued that the Tribunal ignored significant evidence, including statements of the proprietor and employees, which were not retracted. The revenue contended that the clearances exceeded the permissible limit, necessitating registration under the Central Excise Act. The revenue also pointed out that the Tribunal did not correctly interpret the statements of employees and other witnesses. It was argued that the Tribunal's findings were contrary to the evidence on record, leading to a claim of perversity.

Arguments by the Respondent:
The respondent argued that the Tribunal's findings were based on a proper appreciation of evidence. It was contended that the revenue failed to establish a money trail or any evidence of clandestine removal. The respondent highlighted that the statements of buyers and suppliers did not support the revenue's case. The respondent also pointed out that the revenue did not investigate other customers mentioned in the notebooks. The respondent argued that the Tribunal's findings were not perverse and did not warrant interference.

Court’s Conclusion:
The court concluded that the Tribunal had discussed the evidence in detail and based its conclusions on findings of fact. The court found that the Tribunal’s view was plausible and in consonance with the evidence on record. The court held that the findings were not perverse and did not give rise to a substantial question of law. Consequently, the appeals were dismissed in the absence of any substantial question of law.

Final Order:
The appeals were dismissed as the court found no substantial question of law arising from the Tribunal's decision. The Tribunal's findings were upheld as they were based on a proper appreciation of evidence and were not perverse.

← Previous Next →