2020 (6) TMI 253 - AT - Central Excise

Clandestine Removal - clearance of goods without issuance of invoice without payment of duty - SCN issued after a gap of four years of investigation - time limitation - HELD THAT - The facts of the case are not disputed. That an investigation was conducted on the premises of M/s Pankaj Ispat Limited and records recovered in clandestine procurement of raw material. Moreover, the show cause notice has been issued after a gap of almost four years. Similar issue decided in the case of MANMEET ISPAT PRIVATE LIMITED VERSUS COMMR. OF C. EX., CUS. S.T., RAIPUR 2020 (1) TMI 418 - CESTAT NEW DELHI where it was held that the show cause notice dated 3.2.2016 issued after four years is hopelessly barred by limitation. The proceedings against the appellant are not sustainable on the basis of third party evidence which is highly time barred - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against duty, interest, and penalty imposition based on investigation findings and third-party evidence.

Analysis:
The case involved an appeal against an order demanding duty, interest, and penalty on the appellants based on an investigation at M/s Pankaj Ispat Limited premises, where the appellant's name appeared in records indicating procurement of raw material without duty payment. The show cause notice alleged clearance of goods without invoices or duty payment to M/s Pankaj Ispat Limited, leading to adjudication. The adjudicating authority initially dropped proceedings against the appellant, citing lack of investigation at their premises and inadmissible third-party evidence. However, the Commissioner (Appeals) held the appellants liable for duty and penalties, prompting the appeal.

The appellant's counsel argued for following a similar precedent where proceedings were dropped against another party in a similar case. The Revenue's Authorized Representative supported the impugned order. The Tribunal noted undisputed facts of the investigation at M/s Pankaj Ispat Limited's premises and the issuance of the show cause notice after a significant time gap.

Referring to a similar case, the Tribunal emphasized that demands cannot stand solely on privately maintained third-party records without concrete evidence linking the appellant to clandestine activities. The Tribunal also highlighted the Revenue's delayed action and lack of substantial evidence against the appellant, rendering the show cause notice issued after four years as time-barred and unsustainable. Consequently, the Tribunal set aside the impugned order, allowing the appeal with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the insufficiency of third-party evidence and the time-barred nature of the proceedings, ultimately leading to the appeal's success and relief for the appellants.