2003 (7) TMI 130 - AT - Central Excise

Demand - Clandestine removal - corroborative evidence - chits/notes - HELD THAT - In the present case no such evidence has been placed on record. Therefore the Commissioner (Appeals) after due consideration found that there was no evidence on record and based on the Tribunal s judgment has set aside the demands. He has also noted that the lower authority had dropped a demand of Rs. 26, 801/-mentioned in the chit and note on the ground that they were covered under proper documents. The revenue has relied on the judgment rendered in the case of Haryana Acrylic Manufacturing Co. Pvt. Ltd. v. CCE 2000 (9) TMI 541 - CEGAT NEW DELHI . On perusal of the judgment it is seen that there was shortage of inputs and the inputs had been removed from the stores and had been placed in a different place. They also found documents of removal supported by the transport documents from head office to factory and various other pieces of circumstantial evidence to establish the fact of receipt of inputs manufacture of goods and sale of the same. In view of that Tribunal upheld the discharge of clandestine removal. In the present case except the chits and the admissions which is based on the chits revenue has not produced any other evidence like shortage of raw materials purchase of inputs excess power consumption payment made to suppliers of raw materials excess of profit and all other evidence which is required to establish clandestine manufacture removal and sale of the product. Therefore Commissioner (Appeals) after due examination satisfied himself that the revenue did not establish clandestine removal. Even before us the revenue has not produced any document to support their charge of clandestine removal. They have only produced the copies of Order-in-Original and Orders-in-Appeal. There is no material available before the Bench also to come to a conclusion that there was material available for confirming the demands. In that view of the matter Commissioner (Appeals) order is legal and proper. There is no merit in this appeal and hence it is rejected.

Summary

Issues involved: Revenue's appeal against Orders-in-Appeal finding no clandestine removal based on chits/notes and lack of corroborative evidence.

Summary:
The Commissioner of Central Excise (Appeals) held that there was no clandestine removal of goods based on chits/notes and lack of corroborative evidence. The appellant contended that the demands should be confirmed based on clear admissions and private chits. However, the Commissioner set aside the demands due to insufficient evidence. The Tribunal noted that for demands to be confirmed, evidence of purchase of inputs, excess power consumption, shortage of raw materials, and sale of final goods clandestinely is required. As such evidence was lacking, the Commissioner's decision was upheld. The appellant failed to provide additional evidence to support their claim of clandestine removal, leading to the rejection of the appeal.

Separate Judgement: The Tribunal upheld the Commissioner's decision to set aside the demands, emphasizing the necessity of concrete evidence to establish clandestine removal. The lack of supporting evidence, such as shortage of raw materials and excess power consumption, led to the rejection of the appeal. The Tribunal highlighted the importance of thorough documentation and proof in cases of alleged clandestine activities.