CESTAT Quashes Penalty u/s 11AC of Central Excise Act on Clandestine Manufacture and Removal of Ferro Silico Manganese on ground of Absence of Relevant Evidence [Read Order]

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under section 11AC of the Central Excise Act,1944 on clandestine manufacture and removal of ferro silico manganese on the ground of absence of relevant evidence. 

Attitude Alloys Private Ltd, Arun Kadmawala, and Sitaram Agarwal, the appellant assessee were a company that manufactured and cleared the Ferro Silico Manganese from their factory. 

The assessee appealed against the order passed by the adjudicating authority for confirmation of the demand of excise duty based on computerized data maintained by the computer operator of the Ajay Behera which had been retrieved from a pen drive recovered from one of the office table drawer of Behera, during search of office premises and for the imposition of penalties against the assessee. 

Kartick Kurmy, the counsel for the assessee contended that there was no recovery of parallel invoices showing clandestine clearance of finished goods and the conclusion of clandestine clearance had been drawn from the data recovered from the pen drive and the clandestine clearance was only based on assumptions and presumptions, which vitiated the entire proceedings. 

S. Mukhopadhyay, the counsel for the department relied on the decisions made by the lower authorities and contended that there was a clandestine removal of ferro silico manganese and that the penalty imposed against the assessee was as per the law and liable to be sustained. 

The Bench observed that no evidence has been brought on record to establish that the directors are involved in the clandestine manufacture and clearance of the goods and as the evidence available on record does not establish the clandestine manufacture and clearance the penalty imposed was not sustainable. 

The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the penalty imposed against the assessee while allowing the appeal filed by the assessee. 

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