2020 (3) TMI 199 - AT - Central Excise

Clandestine removal - excesses and shortages of bricks and sponge iron - no corroborative evidences of allegation found - HELD THAT - The entire case of the Revenue is based upon the shortages detected at the time of visit of the officers. There is no corroborative evidence showing any clandestine manufacture and removal of the goods. The legal position is settled laying down that clandestine removal allegations cannot be upheld only on the ground of shortages detected by the visiting officers, in the absence of any other evidence. Inasmuch as in the present case, there is no other evidence to substantiate the charge of clandestine removal, impugned order is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Confirmation of demand of duty in respect of short-found goods based on shortages detected at the time of visit by Central Excise officers.

Analysis:
The case involved the confirmation of a demand of duty amounting to &8377; 3,12,944/- in respect of short-found goods at the premises of the appellants, who were engaged in the manufacture of asbestos bricks, fly ash bricks, and sponge iron. The Central Excise officers visited the factory and detected shortages in bricks, as well as an excess of sponge iron compared to the recorded balance. The Revenue's case was primarily based on these shortages, alleging clandestine removal of goods. However, the Member (Judicial) noted that there was no corroborative evidence to support the charge of clandestine removal apart from the shortages identified during the visit. The Member referred to established legal precedents, emphasizing that allegations of clandestine removal cannot be sustained solely based on shortages without additional evidence. Notably, the Tribunal had previously set aside the confiscation of excess goods in a separate case. Given the lack of supporting evidence, the Member set aside the impugned order and allowed the appeal, providing consequential relief to the appellant.

This judgment highlights the importance of corroborative evidence in cases involving allegations of clandestine removal of goods. The Member's decision to set aside the demand of duty was based on the lack of additional evidence beyond the shortages identified during the visit. By referencing relevant legal cases, the Member reinforced the principle that mere shortages alone are insufficient to establish clandestine removal. The decision underscores the necessity for Revenue authorities to substantiate allegations with concrete evidence beyond initial discrepancies observed during inspections. Ultimately, the judgment serves as a reminder of the legal standards required to uphold charges of clandestine activities in excise matters, emphasizing the need for a robust evidentiary basis to support such allegations.