2019 (4) TMI 992 - AT - Central Excise

Clandestine removal - MS Ingots - case has been made out on the basis of third party evidence - HELD THAT - There is an admission by the appellant that they have cleared the goods without payment of duty, but during the course of investigation, on pointing out, immediately, the appellants had paid the duty to buy peace - further, during the course of cross examination, the recipients of the goods has denied the receipt of the goods and the said evidence is required to be considered by the authorities while imposing penalty on the appellant, but the same has not been considered. In that circumstance, penalty is not imposable on the appellant. Appeal allowed in part.

Summary

Issues:
1. Confirmation of duty demand for clandestine clearance of goods.
2. Validity of demand based on third-party evidence.
3. Requirement of show cause notice after voluntary payment of duty.
4. Imposition of penalty based on admission of clandestine clearance.
5. Consideration of evidence from recipients of the goods in penalty imposition.

Analysis:
1. The appellant appealed against an order confirming duty demand due to alleged clandestine clearance of goods without payment. A search revealed unauthorized clearance of MS Ingots without invoices, leading to the duty demand, interest imposition, and penalty. The appellant contested the demand, leading to the present appeal.

2. The appellant argued that the case relied on third-party evidence, challenging the sustainability of the demand. Additionally, the appellant contended that they voluntarily paid the duty during the investigation, negating the necessity of a show cause notice. The Revenue, however, supported the demand, citing the appellant's admission of clandestine clearance as justification.

3. After hearing both parties, the tribunal noted the appellant's admission of unauthorized clearance without duty payment. However, it was observed that the appellant promptly paid the duty upon detection during the investigation, indicating a willingness to rectify the error. The tribunal found that the penalty imposition did not consider crucial evidence from recipients denying receipt of the goods, warranting a reconsideration.

4. Consequently, the tribunal set aside the penalty imposed on the appellant, emphasizing the importance of considering all evidence, including statements from recipients, in penalty imposition. The appeal was disposed of based on these observations, providing relief to the appellant regarding the penalty while upholding the duty demand due to the admitted clandestine clearance.