2019 (7) TMI 6 - AT - Central Excise

Clandestine removal - case against the Appellant unit is mainly booked on the basis of records of transporter M/s Rajasthan Goods Carrier and statements of its employee - inspection sought by the appellant - principles of natural justice - HELD THAT - The Panchnama and other records of which inspection has been sought by the Appellant should have been provided to the Appellant. The documents relied upon in the show cause notice also should have been provided to the Appellant to prepare their case - it is considered fit remand the case back to the adjudicating authority to provide the copies of records as pleaded by the Appellant and to decide the case thereafter expeditiously after granting them opportunity of being heard - appeal allowed by way of remand.

Summary

Issues:
- Alleged clandestine removal of goods by the Appellant
- Confiscation of goods seized from the transporter premises
- Lack of evidence and documentation provided to the Appellant for inspection
- Discrepancies in the clearances alleged against the Appellant

Analysis:
1. The case revolved around the alleged clandestine removal of goods by the Appellant, a manufacturer of Copper Tubes and pipes. The Commissioner of Central Excise issued a show cause notice based on discrepancies found during a search at the factory and the seizure of goods from M/s Rajasthan Goods Carrier. Statements from various individuals, including employees of the transporter and the Director of the Appellant, were recorded, implicating the Appellant in the evasion of duty.

2. The Appellant contested the allegations, arguing that there was no concrete evidence of clandestine removal. They pointed out inconsistencies in the statements and documents provided by the transporter, suggesting the possibility of goods belonging to other parties being transported under the Appellant's name. The Appellant also highlighted that they always cleared goods with proper invoices and disputed the reliability of third-party documents.

3. The Appellant further argued that they were not given access to crucial documents for inspection, such as unnumbered challan and panchnama at Rajasthan Goods Carrier. They emphasized the lack of substantial evidence, like unaccounted procurement of raw materials and independent corroboration, to support the allegations of clandestine removal. The Appellant cited legal precedents to support their defense.

4. On the other hand, the revenue contended that the Appellant collaborated with M/s Rajasthan Goods Carrier to clear goods clandestinely, as evidenced by statements and records from the transporter. The revenue highlighted the code names on LR documents, the absence of duty payment evidence, and the modus operandi observed in multiple cases, indicating the Appellant's involvement in the evasion of duty.

5. After hearing both sides and reviewing the records, the Tribunal found that the case heavily relied on transporter records and employee statements. The Tribunal acknowledged the Appellant's grievances regarding lack of document inspection and the absence of specific records supporting the alleged clearances. Consequently, the Tribunal set aside the impugned order and remanded the case back to the adjudicating authority for providing necessary documents to the Appellant and a fair hearing, emphasizing the importance of due process.

6. The judgment, pronounced on 28.06.2019 by the Appellate Tribunal CESTAT AHMEDABAD, highlighted the significance of providing access to relevant documents and ensuring a fair opportunity for the Appellant to present their case. The decision to remand the case underscored the importance of procedural fairness and adherence to legal principles in resolving disputes related to alleged duty evasion and clandestine removal of goods.