2000 (3) TMI 426 - AT - Central Excise

Summary

Issues:
1. Benefit of invisible loss to a party.
2. Benefit in absence of corroborative evidence.

Issue 1: Benefit of invisible loss to a party
The case involved whether the benefit of invisible loss, specifically 0.5%, could be granted to a party even if the loss was not shown in the party's statutory records. The Tribunal examined the case where the stock of intermediate goods was found to be less than recorded, resulting in a shortage. The Assistant Collector confirmed the demand and imposed a penalty, which was challenged by the assessee. The Tribunal, after reviewing the evidence, concluded that the statement of the authorized signatory did not amount to a confession and there was no corroborative material to establish clandestine production and clearance. It noted that the shortage, when compared to the stock, was minimal (about 7.5% for the period) and considered it normal. The Tribunal emphasized the lack of direct admission by the signatory and held that the allegation of clandestine production was not sustained.

Issue 2: Benefit in absence of corroborative evidence
The second issue revolved around whether benefit could be granted to a party in the absence of corroborative evidence, especially when production was not properly accounted for, leading to the inference of clandestine removal. The Tribunal referred to a previous decision which held that the charge of clandestine removal without proof or evidence is arbitrary. It emphasized that since the production itself was not established, the question of its accountal did not arise. The Tribunal relied on settled positions and legal precedents to conclude that the state of evidence did not support the claim of clandestine removal. It highlighted that the non-establishment of production was a factual finding, not a legal question, and therefore, did not warrant a reference to the High Court. Ultimately, the Revenue's petition was rejected based on the lack of evidence supporting the allegations of clandestine removal.

In summary, the judgment addressed the issues of granting the benefit of invisible loss to a party and providing benefit in the absence of corroborative evidence. The Tribunal emphasized the importance of evidence and legal precedents in determining the validity of claims related to production losses and clandestine removal. The decision underscored the need for substantial proof to support allegations and highlighted the significance of factual findings in legal proceedings.