2018 (5) TMI 1349 - AT - Central Excise

Clandestine removal - Demand on the basis of income surrendered before the Income Tax Authorities - Held that - the Revenue has not come forward with any evidence that income surrendered to the Income Tax authorities pertain to clandestine manufacture and clearance of the goods. In that circumstance, the SCN was issued to demand duty on assumptions and presumptions is not sustainable in the eyes of law - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand confirmed based on income surrendered before Income Tax Authorities.

Analysis:
The appellants surrendered income of ?60 lakhs before Income Tax Authorities during a survey, leading to proceedings to determine the reasons behind the surrender. The appellants claimed the income was surrendered to buy peace and was due to a higher GP rate claimed in their accounts. The Revenue alleged the surrendered income was from goods cleared clandestinely, but failed to provide concrete evidence. The Tribunal emphasized the lack of evidence to link the surrendered income to clandestine activities, citing precedents where duty cannot be demanded without proof. The Tribunal held that without evidence, demanding duty based on assumptions is not valid in law. Consequently, the impugned order was set aside, and the appeals were allowed with consequential relief.