2006 (4) TMI 16 - AT - Central Excise

Central Excise - Clandestine removal - Evidence of clandestine removal - Demand - HELD THAT - Admittedly no evidence has been produced on record by the Revenue the evidentiary value of the statements relied upon by the Revenue already stands discussed by me in the proceedings paragraph. The said statements having been made u/s 108 of the Customs Act 1962 are not comparable to the confession re corded u/s 164 of CRPC before Magistrate and as such are required to be corroborated by evidence of removal without payment of duty. As already discussed the said statements are devoid of probative value and cannot be considered to be supportive of charges of clandestine removal. Inasmuch as there is no concrete evidence on record to show clandestine removal of the yarn the impugned orders are unsustainable. The same are accordingly set aside and appeals allowed with consequential relief to the appellants.

Summary

Issues:
Alleged clandestine removal of yarn, imposition of duty demand, personal penalties on individuals, evidentiary value of statements, entries in rough register, lack of concrete evidence for clandestine removal.

Analysis:
The case involved the appellant, engaged in the manufacture of texturized yarn, facing allegations of clandestine removal of yarn, leading to the imposition of duty demand and personal penalties on individuals. Central Excise officers visited the factory, discovering entries of unrecorded production in a rough register. Statements of individuals, including partners not actively involved in daily operations, were recorded during the investigation.

The Revenue's case primarily relied on the entries in the rough register and statements of individuals. However, the adjudicating authority observed that the partners mentioned in the statements were not actively involved in the operations, raising doubts about the veracity of their admissions. The statements were considered unreliable due to the lack of direct involvement in the operations by the mentioned individuals.

The appellant argued that entries in the rough register, maintained by illiterate workers for packing and weighing purposes, could not solely prove clandestine manufacture. Referring to tribunal decisions, it was emphasized that allegations of clandestine activities required concrete evidence such as procurement records, electricity usage, and customer purchases. The lack of such evidence undermined the evidentiary value of the statements and entries in the rough register.

Ultimately, the tribunal found the lack of concrete evidence supporting clandestine removal of yarn, leading to the decision to set aside the impugned orders and allow the appeals with consequential relief to the appellants. The judgment highlighted the importance of corroborative evidence in cases involving allegations of clandestine activities to establish charges beyond doubt.