Absence of Corroborative Evidence on allegation of Clandestine Manufacture and Removal of finished Goods: CESTAT quashes Duty demand

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), quashed demand of duty on the ground that there was absence of corroborative evidence on allegation of clandestine manufacture and removal of finished goods.

The appellant, Pitabhas Chhotray, Director M/s. Maa Foundry Private Limited is engaged in the manufacture of C.I. Ingot Moulds (C.I. Mould), Pig Iron and C.I. Scrap etc. which are used as raw materials. Acting on intelligence received search was carried out and certain incriminating document was recovered. It was alleged that the Appellant had purportedly clandestinely produced and removed 1283 MT, 660.230 MT and 20.770 MT aggregating to 1964.970 MT of C.I. Moulds without payment of duty of Rupees forty-four lakhs.

The Counsel for the assessee, submitted that there is no tangible, cogent and corroborative evidence on record and that here is no confession of guilt. No independent investigation carried out and hence demand is confirmed on mere comparison of private records with Central Excise Invoice.

In the instant case the entire case is based on the private records seized from the residence of the employee Anirudha Sutar and office of the Appellant. There is considerable force in the contention of the Appellant that the private records relied upon by the Revenue cannot be a basis to uphold the serious charge of clandestine clearance.

It is settled legal position that charge of clandestine clearance is a serious charge and the onus to prove the same is on the Revenue by adducing concrete and cogent evidence. In the absence of corroborative evidence, the issue in the instant case i.e. “the charge of clandestine clearance” cannot be labeled against the assessee.

A Bench consisting of P K Choudhary, Judicial Member held that “I hold that the allegation of clandestine manufacture and removal of finished goods by the Appellant made in the Show Cause Notice, is merely on assumption and presumption, without sufficient material evidence corroborating the said allegations. Therefore, I set aside the impugned order.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates