2018 (2) TMI 277 - AT - Central Excise

Clandestine removal - demand based upon entries made in the private booklet which was recovered during the visit by the officers to the premises of the main appellant - Held that - In the absence of any evidence to show or indicate that this booklet on which reliance has been placed by Revenue to hold that there was clandestine removal for the period 1.9.2001 to 15.9.2001, entire case of the Revenue falls down in the absence of any corroborative evidence in the form of purchaser or transporter s document to indicate clandestine clearance from the factory premises of the appellant. The charge of clandestine removal of the goods by the main appellant and consequent penalty on the Director does not stand scrutiny of the law and the demand needs to be set aside. Since the demand is set aside, interest liability and penalty on the main appellant as well on the individual does not survive. Appeal allowed - decided in favor of assessee.

Summary

Issues:
Appeal against Order-in-Appeal dated 28.5.2010 by Commissioner, C.Ex. & Customs (Appeals), Surat I regarding demand of duty, penalty, and interest on clandestine removal of goods based on private booklet entries.

Analysis:

1. Facts and Background:
The appeals involved M/s Viveklene Industries Ltd., Shri Vimal Kumar Agarwal, and Revenue against the Order-in-Appeal dated 28.5.2010 by the Commissioner, C.Ex. & Customs (Appeals), Surat I. The central issue revolved around a show cause notice dated 18.7.2005, demanding duty and imposing penalties based on alleged clandestine removal of goods supported by entries in a private booklet.

2. Appellant's Arguments:
The Appellant's counsel argued that the private diary entries were misinterpreted as clandestine removal, emphasizing that the records correlated with duty paid clearances. They highlighted the absence of corroborative evidence besides a confessional statement. Legal precedents like the Saakeen Alloys case were cited to support their position.

3. Revenue's Arguments:
The Revenue contended that the private booklet entries indicated clandestine removal, supported by the Director's admission. They argued that the confirmation of demand was correct, citing the first appellate authority's findings.

4. Tribunal's Findings:
After reviewing both sides' submissions and the evidence, the Tribunal noted the Revenue's case hinged on the private booklet, panchanma indicating shortages, and a confessional statement. However, upon closer examination of the booklet, it was found that the dates were not specific to 2001, and the Director's statement was not relied upon. Lack of evidence linking the booklet to clandestine removal weakened the Revenue's case.

5. Conclusion:
The Tribunal ruled in favor of the Appellant, setting aside the demand for duty, interest, and penalties due to insufficient evidence of clandestine removal. Citing the Saakeen Alloys case, the Tribunal rejected the Revenue's appeal as well, emphasizing the absence of concrete proof of evasion. The judgment was pronounced in open court in 2018, disposing of all appeals.

This detailed analysis encapsulates the key legal arguments, evidentiary considerations, and the Tribunal's reasoning leading to the final decision in the case.