2017 (5) TMI 949 - AT - Central Excise

Clandestine removal of goods - Held that - No corroborative evidence has been produced by the Revenue to substantiate their charge - the evidences revealed by the Revenue are in the shape of entries in diaries of Sh. Apreash Ghosh and transporters register. These documents were never controverter with the respondents and these entries were never supported by any positive evidence, therefore, the Ld. Commissioner (Appeals) has rightly observed that these documents were not sufficient evidence to establish the charge of clandestine removal of goods - demand set aside - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Allegation of clandestine removal of goods.
2. Adequacy of evidence to substantiate the charge of evasion of Central Excise Duty.
3. Reliance on private records and transporter registers as evidence.
4. Evaluation of corroborative evidence.

Detailed Analysis:

1. Allegation of Clandestine Removal of Goods:
The case revolves around the allegation that the respondent evaded the payment of Central Excise Duty through the clandestine removal of goods. The Revenue's appeal was based on the discovery of a small diary (ledger book) and transporter registers during a search of the respondent's factory, which purportedly documented the clandestine activities.

2. Adequacy of Evidence to Substantiate the Charge of Evasion of Central Excise Duty:
The Revenue argued that the diary and transporter registers provided sufficient evidence to confirm the clandestine removal of goods. They cited the case of D. Bhoornull, asserting that it is not necessary to complete the full chain of omission in fraudulent cases. However, the respondent, supported by the Ld. Commissioner (Appeals), contended that the evidence was not corroborated by any positive or corroborative evidence, such as statements from transporters, authors of the diary, or buyers of the alleged clandestinely removed goods.

3. Reliance on Private Records and Transporter Registers as Evidence:
The Ld. Commissioner (Appeals) examined the case records and highlighted that the allegations were based on entries in the diary/cash ledger and transporter registers. The Commissioner noted that there was no admission from any person that the quantities in these entries were removed without payment of duty. The transporters did not admit to transporting goods from the respondent's unit, and the respondent denied the allegations, pointing out the lack of corroborative evidence.

4. Evaluation of Corroborative Evidence:
The Commissioner (Appeals) and the Tribunal referred to several judgments, including M.T.K. Gurusamy Vs. Commissioner of Central Excise Madurai and Utkal Polyweave Industry Pvt. Ltd. Vs. CCE Bhuvneshwar, which established that private records alone are insufficient to prove clandestine removal without corroborative evidence like raw material consumption, manufacturing details, use of electricity, sale of goods, and receipt of money. The Tribunal emphasized that mere entries in private notebooks or transporter registers are not conclusive evidence of clandestine removal unless supported by other substantial evidence.

Conclusion:
The Tribunal upheld the decision of the Ld. Commissioner (Appeals), finding no infirmity in the order. The evidence presented by the Revenue, primarily entries in the diary and transporter registers, was deemed insufficient to establish the charge of clandestine removal of goods. The appeal filed by the Revenue was dismissed, affirming that the charge of clandestine removal involving duty of ?16,66,472/- was not proven due to the lack of corroborative evidence.