2018 (5) TMI 1206 - AT - Central Excise

Clandestine removal - Revenue s entire case is based upon the rough slip pads recovered during the course of visit of the officers as also on the statement of Shri Ankit Chabbra - Held that - apart from the said statements which the appellants have challenged, there is nothing on record to show the clandestine activities of the appellant - Revenue has not made any further investigations as regards the procurement of the raw material and has not approached the raw material suppliers. The allegations of clandestine removal are serious allegations and are required to be proved by the Revenue, by raising sufficient positive evidence. The same cannot be upheld merely on the basis of rough sheets and the uncorroborative statements. There being no corroboration by any acceptable evidence in the present case, impugned order cannot be upheld. Appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against order setting aside confiscation and reducing penalty - Allegations of clandestine removal - Lack of evidence and corroboration.

Analysis:
The appeal was filed by the Revenue against the part of the order of Commissioner(Appeals) which set aside the confiscation and reduced the penalty. The Revenue alleged clandestine removal of goods based on rough slip pads and statements of individuals. The officers found excesses in stock during a factory visit and recovered slip pads indicating clandestine removals. Statements of individuals admitted clearance of goods without invoices or duty payment. The demand was confirmed with a penalty imposed, upheld by the Commissioner(Appeals).

The Tribunal noted the Revenue's case relied on the recovered slip pads and statements. However, the assessee disputed the involvement of one individual in manufacturing activities and highlighted lack of further investigation into raw material procurement. The Tribunal emphasized the need for positive evidence to prove clandestine activities. It criticized the lack of corroboration and absence of buyer identification for the allegedly removed goods. The Tribunal set aside the impugned order, allowing the assessee's appeal due to insufficient evidence supporting the allegations of clandestine removal.

The Tribunal dismissed the Revenue's appeal under the Litigation Policy as the amount involved was less than a specified threshold. The Cross Objections filed by the respondents were treated as an appeal and disposed of accordingly. The judgment highlighted the importance of concrete evidence and corroboration in proving serious allegations like clandestine removal. The decision favored the assessee due to the lack of substantial proof supporting the Revenue's claims. Both appeals, by the Revenue and the assessee, were resolved in favor of the latter, granting consequential relief. The judgment was pronounced on 18.05.2018.