9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 1461 - AT - Central ExciseClandestine removal - excess stock of finished goods which was cleared without payment of duty - entire case is based on investigation conducted by the Income Tax Authority - Held that - The entire case is based on the investigation conducted by the Income Tax Authority wherein some excess stock as compared to the book stock was pointed out - the Central Excise Officers have neither carried out any stock verification nor any further investigation to establish that goods said to have been found in excess was cleared clandestinely. In this position the case under Central Excise which is depending on Income Tax investigation cannot sustain. It is settled that when Central Excise department has not carried out any independent investigation, merely on the basis of material and investigation of other agency, the case under Central Excise Act will not sustain. Reliance can be placed in the case of Ravi Foods Pvt. Ltd Vs. CCE., Hyderabad 2010 (12) TMI 290 - CESTAT, BANGALORE . Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Independent Investigation by Central Excise Officers 2. Reliance on Income Tax Authority's Investigation 3. Evidence of Clandestine Removal 4. Legal Precedents and Judgments Issue-wise Detailed Analysis: 1. Independent Investigation by Central Excise Officers: The appellant's counsel argued that no independent investigation was conducted by the Central Excise Officers. The entire case was based on the investigation carried out by the Income Tax Authority, which found some excess stock. The appellant consistently maintained that there was no stock difference and no clandestine removal of goods. The Tribunal noted that the Central Excise Officers did not carry out any stock verification or further investigation to establish that the goods found in excess were cleared clandestinely. Therefore, the case under the Central Excise Act, which relied solely on the Income Tax investigation, could not be sustained. 2. Reliance on Income Tax Authority's Investigation: The appellant's counsel argued that the investigation by the Income Tax Authority was not free from doubt and that a case under the Central Excise Act could not be made solely on the basis of another agency's investigation without independent verification by the Central Excise Officers. The Tribunal observed that the Central Excise Officers did not conduct any independent investigation and relied entirely on the Income Tax Authority's findings. This reliance without corroborative evidence from the Central Excise Department was deemed insufficient to uphold the demand for excise duty. 3. Evidence of Clandestine Removal: The Tribunal reviewed several judgments to establish the necessity of corroborative evidence for allegations of clandestine removal. In the case of Ravi Foods Pvt. Ltd., it was held that the absence of evidence regarding clandestine manufacturing and removal of goods meant that the charges could not be sustained. Similarly, in Saini Industries Ltd., the Tribunal found that the stock verification by the Income Tax authorities could not be accepted without corroborative evidence from the Central Excise Department. The Tribunal reiterated that clandestine removal must be established by positive evidence, including procurement of raw materials, actual manufacture, and details of transportation and customers. 4. Legal Precedents and Judgments: The Tribunal referred to multiple judgments to support its decision. In Ravi Foods Pvt. Ltd., the Tribunal noted that the Central Excise authorities could not confirm the demand based on the Income Tax Department's investigation alone. In Saini Industries Ltd., the Tribunal upheld that the Income Tax Department's report could not be the sole basis for confirming excise duty without corroborative evidence. In Chetak Marmo Pvt. Ltd., the Tribunal emphasized that clandestine removal must be proven with positive evidence, and mere disclosure of income to the Income Tax authorities was insufficient. In Supreme Cylinders Ltd., the Tribunal found that the Central Excise duty demand could not be confirmed solely based on the Income Tax Department's findings without independent verification by the Central Excise Department. Conclusion: The Tribunal concluded that the Central Excise Department's reliance on the Income Tax Authority's investigation, without conducting an independent investigation or providing corroborative evidence, was insufficient to sustain the demand for excise duty. The impugned order was set aside, and the appeals were allowed, following the ratio of the cited judgments. The decision was pronounced in the open court on 23.10.2018.
|
