2017 (12) TMI 1192 - AT - Central Excise

Clandestine removal - 51.715 MT of M.S. ingots - demand based on hearsay evidence - Held that - issue is settled that hearsay evidence cannot be admitted as evidence to decide any case - In the present case against the appellant the case is based on only on statement of Shri. Abdul Razzak Mundrawal who is given the version of Shri. Gupta and particularly in absence of statement of Shri. Gupta s, statement of Shri. Abdul Razzak Mundrawal based on hearsay cannot be used to confirm the demand against appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Alleged clandestine receipt of M.S. ingots by the appellant
- Reliance on hearsay evidence
- Admissibility of evidence from third parties

Analysis:
- The department alleged that the appellant received M.S. ingots clandestinely and manufactured excisable goods based on statements and weighment slips. The demand was confirmed, and the appeal was made before the Tribunal.
- The appellant's counsel argued that the current management was not present during the alleged receipt and that the statement implicating the appellant was hearsay evidence. Several judgments were cited to support this argument.
- The Tribunal considered both sides' submissions and found that the only defense presented was the hearsay nature of the statement by the present director, based on the former director's version. Notably, the department did not record the former director's statement, rendering the evidence hearsay and inadmissible.
- Referring to relevant case law, the Tribunal emphasized that hearsay evidence cannot be the sole basis for a conclusion. Citing specific cases, the Tribunal highlighted the importance of corroborative evidence and the inadmissibility of hearsay evidence in deciding cases.
- Ultimately, the Tribunal concluded that the case against the appellant was solely based on hearsay evidence, as the statement relied upon was hearsay and lacked corroboration. In the absence of direct evidence and considering the legal precedents, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the inadmissibility of hearsay evidence in confirming demands.

This detailed analysis of the judgment highlights the issues raised, the arguments presented by both parties, the legal principles applied, and the ultimate decision reached by the Tribunal.