2021 (5) TMI 415 - AT - Central Excise

Clandestine removal - whether the demand is based on assumptions and presumptions without any positive evidence? - penalty - HELD THAT - There are no observation to justify upholding the duty demand, as has been claimed to have made by the learned Commissioner. Since a detailed observation has been made in the impugned order to hold that the charge of clandestine manufacture and clearance is not supported by any positive evidence and is merely based on assumption and presumption, which has not been rebutted, there are no reason to uphold the duty demand. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Upholding duty demand while setting aside penalty amount.
2. Charge of clandestine clearance of excisable goods based on assumptions.
3. Lack of positive evidence supporting duty demand.
4. Appellant's appeal against duty demand.

Analysis:
1. The appeal was filed by M/s. Manaksia Steel Pvt Ltd against an Order-in-Appeal dated 11.09.2018, where the duty demand of &8377; 35,98,637/- along with interest for the period October 2013 to March 2014 was upheld, but the penalty amount imposed under u/s 11AC of the Central Excise Act, 1944 was set aside by the learned Commissioner (Appeals).

2. The charge of clandestine clearance of excisable goods was made based on assumptions without positive evidence, as revealed during search operations by the officers of DGCEI at the appellant's premises. The learned Commissioner (Appeals) set aside the penalty amount but confirmed the duty demand, leading to the appellant's appeal before the Tribunal.

3. The Advocates for the appellant argued that since the charge of clandestine clearance was deemed unsustainable, the confirmation of duty demand was illegal. They highlighted that no positive evidence supported the charge, and the duty demand should also be set aside based on the lack of substantiated claims.

4. After careful review, the Tribunal found that the duty demand lacked justification as it was primarily based on assumptions and presumptions without concrete evidence. The Tribunal noted that the charge of clandestine manufacture and clearance was not supported by positive evidence and was merely speculative, leading to the decision to set aside the duty demand and interest, allowing the appeal with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the duty demand and interest while emphasizing the importance of concrete evidence to support charges of clandestine activities to avoid unjust penalties.