2009 (7) TMI 1126 - AT - Central Excise

Clandestine removal - stock found in excess - Held that - mere non-accountal of goods in RG-1 register would not invite confiscation of the same or imposition of any penalty unless there is an evidence to show that the goods were meant for clandestine removal - apart from the initial statement of authorized signatory, there is no other independent evidence on record. This statement, when viewed in the light of the subsequently produced documentary evidence, loses its evidentiary value, as it is well settled that the documents speak louder. In view of the above, by extending the benefit of doubts to the appellant, the impugned order set aside - appeal allowed - decided in favor of appellant.

Summary

The Appellate Tribunal CESTAT AHMEDABAD, in the case of M/s. A. Kumar Industries, disposed of three appeals arising from the same impugned order. The excess stock of finished goods of M.S. Ingots was found unrecorded in the RG-1 register during a visit by Central Excise officers to the appellant's factory. The officers seized the goods, suspecting clandestine removal. Proceedings were initiated, resulting in the confirmation of demand, imposition of penalties, and confiscation of goods. The Commissioner (Appeals) later observed that the goods were subsequently entered in the register, questioning the justification for confirming the duty but upholding penalties and confiscation. The appellants claimed the goods were rejected by a customer, returned, and unutilized, supported by documentary evidence. The Tribunal, referring to a past case, ruled that non-accountal of goods alone doesn't warrant confiscation or penalties without evidence of clandestine intent. The Tribunal found the documentary evidence credible, discrediting the initial statement of the authorized signatory, and overturned the impugned order, allowing all three appeals. Ms. Archana Wadhwa presided over the judgment, with Shri H.D. Dave representing the appellant and Shri R.S. Srova representing the respondent. The order was dictated and pronounced in court.