2015 (8) TMI 1177 - HC - Central Excise

Duty demand - Clandestine removal of goods - whether the goods found stored in the various outside godowns are the goods clandestinely manufactured and cleared by the respondents M/s. Kuber Tobacco Products Pvt. Ltd. and M/s. Kuber Khaini Pvt Ltd. - Held that - findings of the Commissioner(Appeal)s show that he has elaborately discussed the evidence. This approach can hardly be characterised as perverse or unreasonable appreciation of evidence to warrant interference or to impel to conclude that substantial question of law arises. - appeal is therefore meritless - Decided against Revenue.

Summary

Issues:
1. Appeal against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Excise Appeal No.2196/2006-EX(SM).
2. Allegations of theft of tobacco products from the factory premises.
3. Lack of nexus between brand ownership and manufacturing unit.
4. Failure to establish evidence of duty evasion.

Analysis:
1. The revenue challenged the CESTAT's order, claiming it was based on a perverse appreciation of facts. The assessee was accused of theft of tobacco products from its factory premises, leading to investigations and seizures. An addendum and show cause notice were issued, resulting in confirmation of charges and penalties by the adjudicating authority.

2. The Appellate Commissioner allowed the assessee's appeal, citing the revenue's failure to prove a nexus between brand ownership and the manufacturing unit. Despite seeking reports on the godowns' ownership, substantial evidence was lacking. Relying on legal precedents, the Appellate Commissioner set aside the adjudicating authority's findings.

3. The Tribunal upheld the Appellate Commissioner's decision, noting the absence of evidence supporting the allegations. Individuals claiming ownership of the goods emerged during the investigation, casting doubt on the revenue's claims. Without proof of manufacturing and clearance without duty payment, the Tribunal found no reason to overturn the Commissioner's findings.

4. The High Court affirmed the Tribunal's decision, emphasizing the detailed discussion of evidence by the Commissioner. The Court deemed the approach reasonable and not perverse, concluding that no substantial legal question arose. Consequently, the appeal was dismissed as meritless, and related applications were disposed of as infructuous.