2018 (2) TMI 892 - AT - Central Excise

Clandestine removal - certain manufactured goods have not been entered in statutory records and certain torn out invoices were also found in dustbin - retraction of statements - Held that - the affidavit which has not been filed with the Department in time cannot be the basis for violation that the statement has been retracted from next day by Shri Nagappa. Therefore the retraction is not admissible - Revenue has been able to prove clandestine removal of goods on the basis of the torn of invoices recovered during the course of investigation - demand upheld - penalty on partnership firm upheld - penalty on partner set aside - appeal allowed in part.

Summary

Issues Involved:
- Clandestine removal of goods
- Confirmation of demand and imposition of penalties
- Evidence presented by the Revenue
- Retraction of statement by the appellant
- Admissibility of evidence

Analysis:

Clandestine Removal of Goods:
The case involved an appeal against an order confirming demand and imposing penalties on the appellant for alleged clandestine removal of goods. The investigation revealed torn out invoices in the factory premises, indicating possible clandestine activities. The appellant argued that the lack of specific details on the torn invoices made the charge unsustainable. However, the Tribunal noted that in cases of clandestine removal, the modus operandi is crucial, and the absence of invoice numbers or consignee names does not negate the charge.

Confirmation of Demand and Penalties:
The appellant contested the confirmation of demand on seized goods, arguing that the amount had already been paid as duty. The Tribunal upheld the demand of one amount but set aside the demand for goods cleared on payment of duty. Additionally, a penalty imposed on a partner was deemed inappropriate as the firm was a partnership, leading to the penalty's removal.

Evidence Presented by the Revenue:
The Revenue provided torn invoices and a statement from an authorized signatory admitting to the practice of clearing goods using such invoices. Despite the appellant's claim of retraction through an affidavit, the Tribunal deemed the retraction inadmissible as it was not timely filed with the Department. The evidence presented by the Revenue, including the statement and torn invoices, supported the finding of clandestine removal.

Retraction of Statement by the Appellant:
The appellant attempted to retract the statement made by the authorized signatory regarding the clearance of goods. However, the Tribunal ruled that the belated submission of the retraction affidavit rendered it inadmissible, upholding the original statement as evidence of clandestine activities.

Admissibility of Evidence:
The Tribunal emphasized the importance of considering timely submissions and upheld the Revenue's evidence, including the torn invoices and the statement of the authorized signatory, as sufficient proof of clandestine removal. The decision was based on the evidence presented during the investigation, disregarding the later retraction attempt by the appellant.

In conclusion, the Tribunal confirmed the demand for one amount, set aside another demand, and removed a penalty imposed on a partner, concluding the appeals based on the evidence of clandestine removal presented by the Revenue during the investigation.