2017 (7) TMI 398 - AT - Central Excise

Clandestine removal - Held that - the assessee produced the statements by way of reconciliation of the documents and DSA which were not refuted by the Revenue in their grounds of appeal - the said case laws cited by Revenue are not applicable in the facts and circumstances of the present case - appeal dismissed - decided against Revenue.

Issues Involved:
1. Shortage in stock taking
2. Production Slip (pink coloured)
3. Transport slip
4. Consignment sent to M/s. BMW Industries

Detailed Analysis:

1. Shortage in Stock Taking:
The Revenue framed the charge of clandestine removal based on the shortage of stock observed during the visit by Central Excise Officers. The officers relied on pink coloured production slips where bulk products were recorded. The assessee contended that these slips represented goods in bulk, which were yet to be tested, packed, and entered into the Daily Stock Account (DSA). They argued that the officers did not consider the quantity under work in progress. The Commissioner (Appeals) accepted the assessee's reconciliation statement, which detailed the stages of production and entry into the DSA. The Revenue did not dispute this statement in their appeal. Consequently, there was no reason to interfere with the Commissioner (Appeals)’s decision to drop the demand on this issue.

2. Production Slip (Pink Coloured):
The Revenue argued that the assessee recorded total production in pink coloured slips but did not maintain their DSA properly. The demand was calculated by comparing these slips with the DSA. The assessee contended that the slips showed bulk production, which required testing and packing before DSA entry. The Commissioner (Appeals) reviewed representative production slips and DSA clearances, concluding that the bulk goods were packed and cleared on payment of duty. The Commissioner observed that the retention of production slips was unnecessary once BIN cards were generated. The Tribunal agreed with the Commissioner (Appeals), noting that the Revenue ignored material records and relied solely on statements without corroborating evidence.

3. Transport Slip:
The Revenue alleged that goods were cleared under the guise of job work using transport slips and road challans, which were destroyed after payment to the transporter. The assessee argued that the slips related to freight for bringing in empty drums and included apportioned expenses. The Commissioner (Appeals) examined a Chartered Accountant Certificate certifying the transport expense and found no evidence of finished goods clearance. The Tribunal found that the visiting officers did not investigate the transport slips further, supporting the Commissioner (Appeals)’s findings.

4. Consignment to M/s. BMW Industries:
The Commissioner (Appeals) upheld the demand based on the consignment sent to M/s. BMW Industries. The Tribunal reviewed various decisions emphasizing that clandestine removal charges require concrete evidence beyond mere statements or document discrepancies. In the cited cases, the Tribunal consistently held that without corroborative evidence such as raw material receipts, transportation details, or independent verification, the charges of clandestine removal could not be sustained. The Tribunal concluded that the Revenue failed to provide sufficient evidence to substantiate the clandestine removal charges in this case.

Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals)’s order. The Tribunal emphasized the necessity of concrete evidence to support charges of clandestine removal and found that the Revenue's reliance on statements and uncorroborated documents was insufficient. The Tribunal also noted that the assessee provided reconciliation statements and other materials that the Revenue did not refute, further weakening the case for clandestine removal.

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