1990 (2) TMI 163 - AT - Central Excise

Summary

Issues: Alleged clandestine removal of manufactured tobacco due to incomplete markings on bags.

The case involved the discovery of 97 bags of manufactured tobacco in a store room, with varying degrees of completion in terms of stitching and stamping. The Central Excise Officers suspected these bags were being kept for removal surreptitiously, as an entry had been made in the production register and R.G.1 register for 97 bags, indicating they should have already been removed. The Deputy Collector and the Collector (Appeals) held that the bags were not properly marked as required by Rule 51, leading to the confiscation of 62 bags. The appellants argued that their practice was to mark bags at the time of removal, citing personal circumstances for the delay in marking. The main contention was whether the incomplete markings on the bags indicated clandestine removal.

The appellants contended that the allegation of clandestine removal was not proven, citing case law emphasizing the burden of proof on the department to establish clandestine removal. The department argued that the bags found without proper markings and incomplete packing were not relatable to the entries in the R.G.1 register, indicating clandestine removal. They cited a case law supporting the use of circumstantial evidence to prove clandestine removal.

The Tribunal analyzed the facts and arguments presented. It noted that entries in the R.G.1 register are typically made after goods are ready for removal, and the appellants' practice was to mark bags at the time of removal. The delay in marking was attributed to personal circumstances. The Tribunal found that the mere presumption of clandestine removal based on incomplete markings was not supported by tangible evidence. It highlighted that the exact quantity mentioned in the R.G.1 register was found in the store room, indicating no double transport. The Tribunal concluded that without adequate evidence of clandestine removal, the benefit of doubt should go to the appellants. The case law cited by the department regarding circumstantial evidence was deemed not directly applicable. As a result, the Tribunal set aside the Collector (Appeals) order, providing relief to the appellants.