2017 (4) TMI 82 - AT - Customs

Shortage of stock - clandestine removal - Held that - the stock had not been physically verified. It is also noted that various statements had been record as a prelude to issuance of SCN - There is a significant lack of analysis of the data so collated in the grounds of appeal. Such a sketchy narration in the grounds of appeal does not provide any support whatsoever to the prayer for setting aside the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against dropping of proceedings initiated against a company for alleged duty evasion and penalties under Customs Act, 1962.

Analysis:
The case involved an appeal by Revenue against an order dropping proceedings against a company for alleged duty evasion and penalties. The company, operating under the EPZ scheme, was accused of discrepancies in stock leading to proposed recovery of duty and penalties under the Customs Act, 1962. The impugned order faulted the Revenue's contentions, highlighting the unreliability of internal records without physical verification and lack of scrutiny of prescribed records. The investigators failed to establish that the goods in question were not used in the manufacturing process.

The grounds of appeal by Revenue contended that discrepancies were based on statements from work-in-progress submitted by the company, which had not utilized opportunities to explain the discrepancies. Reference was made to a Supreme Court decision upholding recovery based on accounting discrepancies accepted by the assessee. However, the appellate tribunal noted the lack of authentication of data used in computation of duty, disputed computations, and absence of evidence to discredit the findings of the adjudicating authority regarding manipulation of records to evade duty.

The tribunal found the grounds of appeal lacking in analysis and support to set aside the impugned order. It emphasized the necessity for the Revenue to demonstrate the incorrectness or perversity of the adjudicating authority's findings, which was not achieved through oral arguments or case law references. As a result, the appeal of Revenue was deemed unsustainable and lacking credible grounds to challenge the impugned order, leading to its rejection. The decision was pronounced in court on 07/03/2017.