2018 (9) TMI 1060 - HC - Central Excise

Monetary limit involved in appeal - Clandestine removal - principles of Natural Justice - Whether the ld. CESTAT has grossly erred in law in ignoring the vital evidences in the form of voluntary statements of the Director and General Manager of the Company and the loose slips recovered by the Department during the search in setting aside the order of the ld. Adjudicating Authority? - Whether the ld. Adjudicating Authority grossly erred in law in ignoring the voluntary statements of the Director and General Manager of the Company while dropping the partial demand? - penalty on the Director and General Manager of the Company - sub section (3) & (5) respectively of Section 35G of the Central Excise Act, 1944. Held that - The valuation of seven parchis which were found will come to less than 50 lacs and in view of the circular of the Department dated 11.7.2018, the appeal is not maintainable in view of monetary limits. No substantial questions of law arises - appeal dismissed.

Issues Involved:
1. Ignoring vital evidence by the CESTAT.
2. Ignoring voluntary statements by the Adjudicating Authority.
3. Setting aside penalties on Director and General Manager.
4. Applicability of monetary limits for filing appeals.

Detailed Analysis:

Ignoring Vital Evidence by the CESTAT:
The appellant argued that the CESTAT erred in law by ignoring crucial evidence, including voluntary statements from the Director and General Manager and loose slips recovered during the search. The Tribunal noted that the adjudicating authority had carefully examined 25 out of 32 kachha parchis, correlating them with excise invoices and other documents. The adjudicating authority concluded that the goods were cleared on payment of duty, and the Tribunal upheld this finding, rejecting the Revenue's appeal for the demand of ?30.85 lakhs.

Ignoring Voluntary Statements by the Adjudicating Authority:
The appellant contended that the adjudicating authority erred by ignoring the voluntary statements of the Director and General Manager while dropping part of the demand. The Tribunal observed that the adjudicating authority confirmed a demand of about ?30 lakhs based on seven kachha parchis, which the assessee could not substantiate with proof of clearance under invoices. However, the Tribunal found that the Revenue did not verify with buyers or transporters and lacked tangible evidence to support the allegation of clandestine removal. The Tribunal concluded that the charge of clandestine clearance could not be sustained without corroborative evidence.

Setting Aside Penalties on Director and General Manager:
The appellant challenged the CESTAT's decision to set aside penalties on the Director and General Manager, who were allegedly involved in the clandestine removal of goods. The Tribunal noted that the inculpatory statements did not specifically cover the seven parchis and lacked corroborative evidence. Therefore, the Tribunal did not uphold the penalties.

Applicability of Monetary Limits for Filing Appeals:
The court referred to a circular dated 11.7.2018 from the Central Board of Indirect Taxes and Customs, which set monetary limits for filing appeals. The valuation of the seven parchis was less than ?50 lakhs, falling below the threshold for filing an appeal in the High Court. The court also cited previous judgments, emphasizing that substantial questions of law and tangible evidence are necessary to uphold charges of clandestine removal. The court concluded that the Tribunal's findings were based on facts and did not warrant interference.

Conclusion:
The court dismissed the appeal, upholding the Tribunal's decision to drop part of the demand and set aside penalties. The court emphasized the need for tangible evidence to support allegations of clandestine removal and noted that the monetary limit for filing appeals was not met. The issues were resolved in favor of the assessee, and no substantial questions of law were found to arise.

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