2018 (8) TMI 91 - AT - Central Excise

Clandestine manufacture and removal - suppression of production - excess of stock - case of appellant is that the SCN has been issued on the basis of statements given by the officers of the appellants which made under duress and have not been supported by any concrete evidence - it was also alleged that the stock of alleged excess was taken on the basis of an eye estimate - Held that - The fact of discharged of the accused in the criminal proceedings is a strong reason and ground for holding that the impugned order of learned Commissioner is not sustainable - the impugned order is liable to be set aside on the discharged of the company and persons involved in the case by the Hon ble Special Court of Economic Offences - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Allegations of excess stock and suppression of production.
2. Validity of statements given by the officers of the appellants.
3. Comparison of findings between the Central Excise Department and the Special Court for Economic Offences.
4. Reliance on case laws to support the appellant's arguments.
5. Reiteration of findings by the Departmental Representative.
6. Decision of the Appellate Tribunal CESTAT Bangalore based on the allegations and the Special Court's judgment.

Analysis:

1. The case involved allegations against M/s. Singh Ispat Ltd. for excess stock and suppression of production based on the Central Excise Department's findings during a visit. The Department concluded evasion of duty amounting to Rs. 20,70,800, leading to the issuance of Show Cause Notices for confiscation of goods and duty demand.

2. The appellant's counsel argued that the statements by the appellant's officers were made under duress and lacked concrete evidence to support the allegations. The stock estimation was based on an eye estimate and electricity consumption, without substantial proof, making the impugned order contestable. Case laws were cited to strengthen the appellant's position.

3. The Special Court for Economic Offences, Bangalore, acquitted all accused in a criminal complaint against the company and its personnel, highlighting the lack of specific investigation and concrete evidence to prove the allegations. The Appellate Tribunal considered this acquittal as a strong reason to set aside the Commissioner's order, aligning with the judgments of similar cases.

4. The appellant's counsel also emphasized the alignment of allegations in the Show Cause Notice with those dismissed by the Economic Offences Court, citing various case laws to support the argument for setting aside the impugned order.

5. The Departmental Representative supported the original findings and refuted the appellant's claims regarding statements and stock estimation, emphasizing that the facts of excess stock were acknowledged by the appellants.

6. Ultimately, the Appellate Tribunal allowed the appeals, considering the Special Court's judgment and the lack of substantial evidence to prove the allegations, leading to the setting aside of the Commissioner's order. The decision was based on the alignment of findings and the acquittal in the criminal proceedings, providing consequential relief to the appellants.