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2024 (3) TMI 278 - AT - Central ExciseClandestine removal of goods - wrongful availment of Cenvat Credit - demand on the basis of statements recorded of the Appellants - corroboration of tangible evidence or not - appellant submits that demand confirmed by the Department is an extrapolated figure based on the calculation of production by taking the standard production per batch and simply that by the number of batches appearing in the Finished product analysis Dilatometer Register. HELD THAT - The Department has not adduced any evidence in support of their claims. The Department has relied on the theoretical calculation of production and multiplying such assumed standard with no. of batches so appearing in the FDADR Register furthermore relying on some chits apparently indicating proportion of raw material to be used for production process and drawn inference that the Appellants are removing goods in a clandestine manner. Clandestine removal of goods is a serious allegation and the reliance of Department on such incorporeal data to support their claim is perverse. Furthermore, no evidence has been brought on record to show any excess procurement of raw material for the alleged differential production by the Appellants. Corroborative evidence such as evidence of other inputs required for manufacture, transportation, details of buyers etc. have not been provided by the Department. The Tribunal took note of the decision in KAMAL BIRI FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, MEERUT 1997 (7) TMI 593 - CEGAT, NEW DELHI wherein view has been taken that the allegations of clandestine removal of the goods will not stand established when based on the entries made by the assessee s employee in a diary or on the basis of third party s record in the absence of any corroborative evidence. Similar stance has been taken by this Tribunal in the case of M/S AMBICA ORGANICS, SHRI ANIL KUMAR GUPTA, SHRI VINOD KUMAR GUPTA VERSUS COMMISSIONER, CENTRAL EXCISE CUSTOMS, SURAT-I 2015 (3) TMI 825 - CESTAT AHMEDABAD wherein it was held that statements relied on to establish clandestine removal of goods should hold evidentiary value and with no adequate material available on record, clandestine removal of goods cannot be established. Thus, the existence of corroborative evidence is essential in order to establish clandestine removal of goods and the same cannot be merely based on assumptions and presumptions. In the present case the Department has not adduced such well-fortified evidence that strengthen the claims of the Department. CENVAT Credit - ground for denying Cenvat Credit has been made without recording any statement of the Appellant s staff/directors and without adducing corroborative documentary evidence pertaining to non - utilization of imported Zir Flour - HELD THAT - There is no dispute as regards import of material for which credit was taken, took place and goods reached the job worker at their premises for which transportation charges were paid, bills were raised by the job workers post which goods were received by the Appellant at their premises. It is observed that it is apparent on record that the Cenvat Credit availed by the Appellant was post such receipt from the job worker. There is no material on record to show that the goods were not utilized as inputs therefore there is no wrongful availment of Cenvat Credit when the records of the Appellant reflect due compliance towards all requirements as prescribed under the Cenvat Credit Rules, 2004 for availing such Credit. Under the present facts and circumstances there is no merit in the claim of the Department towards clandestine removal of goods and wrongful availment of Cenvat Credit - the impugned order is set aside - appeal allowed.
Issues Involved:
The issues involved in the judgment are clandestine removal of goods and wrongful availment of Cenvat Credit by the Appellant. Clandestine Removal of Goods: The Appellant, engaged in the manufacture of Ceramic Glaze Frit/Glaze Mix, faced allegations of clandestine removal of goods without payment of Central Excise Duty. The Department's claim was based on theoretical calculations and assumptions, without concrete evidence. The Appellant argued that the Department's calculations were flawed, and there was no tangible evidence to support the allegations. The Tribunal noted that clandestine removal is a serious accusation and cannot be established solely on theoretical data. Rulings from previous cases were cited to emphasize the importance of corroborative evidence, which was lacking in this instance. The Tribunal concluded that the Department failed to provide sufficient proof of clandestine removal, leading to the dismissal of this claim. Wrongful Availment of Cenvat Credit: The Department also accused the Appellant of wrongly availing Cenvat Credit without proper justification. However, the Appellant contended that they had followed all procedures as per the Cenvat Credit Rules, 2004, and there was no evidence of misuse. The Tribunal observed that there was no discrepancy in the utilization of imported material for which the credit was claimed. The Appellant had complied with the necessary requirements, and there was no indication of any wrongful availment of Cenvat Credit. Consequently, the Tribunal ruled in favor of the Appellant on this issue as well. Conclusion: After careful consideration of the arguments presented by both parties, the Tribunal found no merit in the Department's claims of clandestine removal of goods and wrongful availment of Cenvat Credit by the Appellant. Therefore, the impugned order was set aside, and the appeals were allowed with any consequential relief. The judgment was pronounced on 06.03.2024 by the Appellate Tribunal CESTAT Ahmedabad.
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