2014 (7) TMI 651 - AT - Central Excise

Duty demand - Clandestine removal of goods - clearance of goods under pseudo cover of private challans/bailing slips of assessee s principal manufacturer - Held that - Admittedly, apart from the bailing slips, which also stand explained by the respondents, there is no independent evidence showing clandestine removal of goods. The appellate authority has relied upon various precedence decisions of the Tribunal in support of the conclusion arrived at by him. Identical dispute on the basis of the bailing slips produced by M/s. J.K. Woollen & Silk Mills was the subject matter of the Tribunal in the case of Shirley Dyers Vs. CCE, Jallandhar 2013 (12) TMI 108 - CESTAT NEW DELHI and the confirmation of demand was set aside on the ground that there is nothing in bailing slips connecting them to the manufacturer - Decided against Revenue.

Summary

Issues:
1. Allegations of clandestine clearance of goods under pseudo cover of private challans/bailing slips.
2. Confirmation of duty demand and imposition of penalties.
3. Tribunal's order setting aside confirmation and remanding the matter for fresh decisions.
4. Commissioner (Appeals) allowing the appeal due to lack of proper evidence.
5. Review of the Commissioner (Appeals) order and confirmation of the decision.

Analysis:

1. The case involved allegations of clandestine clearance of goods under the cover of private challans/bailing slips. The respondents were engaged in the manufacture/processing of Velvet/Corduroy cloth. The demand of duty was confirmed against them, based on findings of clandestine clearance. The Tribunal set aside the confirmation and remanded the matter for fresh decisions, emphasizing the need for proper examination of the facts and evidence.

2. The original adjudicating authority confirmed the demand of duty along with penalties. However, on appeal, the Commissioner (Appeals) allowed the appeal, highlighting the lack of proper evidence to establish the authenticity of the bailing slips/challans. The Commissioner observed that no independent evidence substantiated the allegation of clandestine removal, leading to the decision to set aside the impugned order.

3. The Tribunal's order directed de novo adjudication due to the lack of reasonable evidence presented by the Revenue. The Tribunal emphasized the importance of following specific directions and laid down by them. The failure of the Revenue to undertake de novo adjudication as directed by the Tribunal led to the appeal being set aside.

4. Upon reviewing the Commissioner (Appeals) order, it was found that apart from the bailing slips, there was no independent evidence supporting the allegations of clandestine removal of goods. The appellate authority relied on precedent decisions of the Tribunal to support the conclusion. The order of the Commissioner (Appeals) was considered detailed and free from infirmity, leading to the rejection of the Revenue's appeal.

5. The judgment by Mrs. Archana Wadhwa upheld the decision of the Commissioner (Appeals) and rejected the Revenue's appeal. The lack of proper evidence and failure to establish the authenticity of the bailing slips/challans were key factors in the decision-making process. The importance of following specific directions given by the Tribunal in such cases was reiterated, emphasizing the need for thorough examination and substantiation of allegations in matters of duty demands and penalties.