1993 (5) TMI 88 - AT - Central Excise

Summary

Issues:
1. Clandestine removal of Trimmed Copper Circles without payment of Central Excise duty.
2. Confiscation of seized Copper Circles and imposition of duty and penalty.

Analysis:
The judgment involves the issue of clandestine removal of Trimmed Copper Circles without payment of Central Excise duty. The appellant, a partnership concern, was found with excess copper circles during a physical verification by Central Excise officers. The officers also seized a personal diary and a handwritten chit showing unaccounted copper scrap. The officers concluded that the appellant had clandestinely removed 43406.450 kgs. of copper circles without paying duty amounting to Rs. 54,189.48. A show cause notice was issued, and the Additional Collector confirmed the duty demand, imposed a penalty, and ordered the confiscation of the seized copper circles. The appellant challenged this decision through an appeal.

The Tribunal considered the submissions of both parties. The appellant argued that the raw material receipts were properly recorded in prescribed vouchers authenticated by Central Excise authorities, indicating no manipulation. The Tribunal noted that even subsequent vouchers were in order, ruling out manipulation. The sole basis for the conclusion of clandestine removal was a retracted statement by the partner of the appellant, which was proven incorrect regarding the non-entry of raw material found on the seized chit. The Tribunal found no corroboration for the interpretation of entries in the personal diary to infer clandestine activities. It held that the diary reflected trading activities, not clandestine removal. The appellant's explanations were supported by sworn affidavits, shifting the burden of proof to the Department, which failed to provide sufficient evidence.

In its decision, the Tribunal set aside the impugned order, allowing the appeal due to the lack of conclusive evidence supporting the allegation of clandestine removal. The Tribunal extended the benefit of doubt to the appellants, emphasizing the absence of substantial evidence against them. The judgment highlights the importance of sufficient evidence and burden of proof in establishing allegations of clandestine activities in excise matters.