2018 (4) TMI 895 - AT - Central Excise

Clandestine removal - MS ingots and rolled products - shortage of goods - Held that - In the absence of any evidentiary material, it is to be held that such shortage which according to the appellant were only on eye estimation basis and did not reflect the correct position - Otherwise also in the absence of any evidence to reflect upon the clandestine clearance of the final product, the findings arrived at by the lower authorities cannot be upheld. Confiscation of raw material - redemption fine - Held that - there is no provision of confiscation of the raw material which has not been entered in the records - the Redemption fine set aside. Appeal allowed in toto.

Summary

Issues involved:
1. Allegation of clandestine removal and confirmation of demand.
2. Justification of demand based on assumption and presumption.
3. Contradictory order regarding confirmation of demand.
4. Confirmation of demand related to stock of raw material.
5. Confiscation of raw material found in excess.
6. Redemption fine on confiscated raw material.

Analysis:
1. The appellants were accused of clandestine removal, leading to a demand confirmation of ?27,69,987. The original adjudicating authority upheld this demand, which was later challenged on appeal.
2. The Commissioner (Appeals) deemed the demand unjustified, citing lack of evidence and reliance on assumptions. The demand was reduced to ?27,69,987, which was then entirely set aside due to lack of substantiation.
3. The Commissioner's decision to set aside the demand but confirm a part of it was deemed self-contradictory by the tribunal, leading to the setting aside of the confirmed part of ?4,92,187.
4. Another demand of ?96,433 was confirmed for raw material allegedly used in the final product without duty payment, based on the Director's statement. However, the tribunal found no evidence of clandestine clearance, leading to the setting aside of this demand as well.
5. The excess raw material was confiscated with a redemption fine of ?40,000. The tribunal noted that there was no provision for confiscation of unrecorded raw material and thus set aside the redemption fine.
6. Overall, the tribunal set aside the impugned orders entirely, allowing both appeals and providing consequential relief to the appellants, highlighting the lack of evidence to support the allegations and demands made against them.