2017 (7) TMI 277 - AT - Central Excise

Clandestine clearance of excisable goods - the whole case against the main appellant is based on the certain entries in the records maintained by the transporter - Held that - It appears that the Revenue placed reliance on sales register of the main appellant. It is also seen that the record seized from the transporter did not show the nature of items transported, weight, rate and freight amount, in any of the entries. Most of the entries even do not have the weight of materials transported. Only in respect of the four entries, where the weights were noted, the Revenue demanded duty stating that the same is not figuring in the appellant s records. It would appear that a case of short payment was sought to be made on the basis of presumption rather than admissible, cogent evidences. Revenue has failed to bring out any cogent, credible and corroborative evidence of unaccounted clearance of dutiable items by the main appellant. In our opinion, the case is built up on some entries maintained by the third party without any element of corroboration from any other source - impugned order set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Unaccounted clearance of excisable goods.
2. Imposition of penalties.
3. Evidence and basis of demand.
4. Barred by limitation.

Analysis:
1. The case revolves around the unaccounted clearance of excisable goods by the main appellant, a company engaged in manufacturing ferro alloys. The central excise officers suspected unrecorded clearances based on entries in a transporter's register, leading to a show cause notice for recovery of short paid duty and penalties.

2. The Commissioner adjudicated the case, confirming a central excise duty of ?29,43,066 against the main appellant, with equivalent penalties imposed on the appellant and the transporting firm. The appellants contested the case, highlighting the lack of evidence supporting the allegations and the absence of incriminating documents from their premises.

3. The Tribunal analyzed the evidence, focusing on the transporter's records as the basis for the demand. However, discrepancies were noted in the entries, with insufficient details to conclusively identify the unaccounted goods. The Tribunal questioned the identification process of the goods and criticized the vague comparison of records by the Original Authority, emphasizing the lack of concrete evidence.

4. Moreover, the Tribunal highlighted the lack of corroborative evidence and reliance on presumptive inferences by the Revenue. The statements of involved parties did not support the allegations of clandestine clearance. Ultimately, the Tribunal concluded that the case lacked cogent evidence, leading to the set aside of the impugned order and allowing the appeals. The demand was considered barred by limitation, further supporting the decision to overturn the order.