2018 (3) TMI 1536 - AT - Central Excise

Clandestine manufacture and removal - evidence - Held that - It is also observed that the entire proceedings were initiated on the basis of assumptions and presumptions - Revenue had not placed any concrete evidence in support of their contention - Appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against Order-in-Appeal No.178/PAT/C.Ex./Appeal/2011 dated 19.10.2011 passed by Commr.(Appeals) of Central Excise, Customs & S. Tax, Patna.

Analysis:

Issue 1: Allegations of clandestine procurement of sponge iron and duty evasion
The case involved the Revenue appealing against the dismissal of their appeal by the Commissioner (Appeals) regarding the demand of duty on goods allegedly clandestinely manufactured from sponge iron procured from a specific company. The Commissioner (Appeals) dismissed the Revenue's appeal on merit and limitation, highlighting that the proceedings were based on assumptions and presumptions. The Commissioner emphasized that the law allows ownership changes on invoices and seizure is only justified for evasion of duty on finished goods. Lack of tangible evidence and failure to establish charges led to the Commissioner setting aside the original order and vacating the seizure. The Revenue's assumptions lacked concrete evidence, as highlighted by the absence of proof of unaccounted procurement of essential ingredients for finished goods, such as Ferro-Alloys and Iron & Steel Scrap.

Issue 2: Lack of concrete evidence and unsustainable assumptions
The Tribunal noted that the Revenue failed to provide substantial evidence supporting their claims. The judgment emphasized that the entire case was built on assumptions and presumptions without concrete proof. The Revenue's reliance on mere calculations and assumptions without tangible evidence was deemed impermissible in law. The absence of evidence regarding unaccounted manufacture of finished goods and clandestine removal, as well as the lack of discrepancies in the assessee's accounts, weakened the Revenue's case. The Tribunal highlighted that assumptions and surmises cannot form the basis for legal actions, citing precedents to support the decision.

Conclusion:
The Tribunal rejected the Revenue's appeal, citing the lack of concrete evidence and unsustainable assumptions as reasons for upholding the Commissioner (Appeals)'s decision. The judgment emphasized the importance of tangible proof in legal proceedings and the impermissibility of basing actions solely on assumptions and presumptions. The case underscored the necessity of substantial evidence to support allegations of duty evasion and clandestine activities, ultimately leading to the dismissal of the Revenue's appeal.