2017 (4) TMI 1078 - AT - Central Excise

Clandestine removal - Department has concluded that without getting itself register with the Central Excise Department and without payment of Central Excise duty, the appellant had cleared the excisable goods from the factory in clandestine manner - Held that - The department has not produced any tangible evidence to prove that the appellant had in fact indulged in clandestine manufacture and clearance of goods. Further, the appellant was duly registered with the Sales Tax Department for resale of various goods mentioned in the registration certificate - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Duty demand against the appellant under Section 11A(1) of the Central Excise Act, 1944.
- Evidence supporting alleged manufacture and clearance of excisable goods.
- Reliability of witness statements and cross-examination.
- Registration with Sales Tax Department and its implications on manufacturing status.

Analysis:
The appeal challenged an order alleging the appellant's engagement in manufacturing and clearance of excisable goods without proper registration and duty payment. The Department claimed the appellant affixed popular brand names on goods not belonging to them, leading to a duty demand of ?8 Lakhs, with penalties imposed. The Commissioner (Appeals) upheld duty demand and penalties on the appellant company but set aside the penalty on a partner. The appellant contended they were not manufacturers and lacked evidence of alleged activities. The advocate highlighted discrepancies in witness statements and lack of cross-examination, questioning the reliability of evidence.

The adjudication order revealed witnesses denying knowledge of crucial documents and activities, with the appellant's manager stating they only repaired goods from scrap dealers. Witnesses relied upon were unavailable for cross-examination, casting doubt on the Department's claims. The appellant's registration with the Sales Tax Department as a trader further supported their non-manufacturer status. The absence of concrete evidence of clandestine manufacturing and clearance, coupled with witness retractions, undermined the Department's case.

The Tribunal, after careful consideration, found no merit in the impugned order. Citing lack of evidence and inconsistencies in witness statements, the Tribunal ruled in favor of the appellant, setting aside the order and allowing the appeal. The appellant's status as a trader, supported by the Sales Tax Department's registration, and the absence of substantial proof of manufacturing activities, led to the decision favoring the appellant.