The Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has deleted the penalty imposed on the alleged clandestine removal of goods, stating that the demand of Central Excise Duty was not sustainable.
The demand of Central Excise Duty has been confirmed against the main appellant herein alleging clandestine removal of the goods. Penalty on all the appellants has also been imposed.
The appellant M/s. Dinabandhu Steel and Power Limited was engaged in the manufacture of Sponge Iron, MS Ingots, TMT Rods, etc. On 18.03.2010, a search was conducted at their factory premises at Kalinga Nagar Growth Centre, office premises at Cuttack and office premises of M/s. Eastern Foods Private Limited (hereinafter referred to as ‘EFPL’) at Jagatpur, Cuttack. Various records were recovered and seized, Panchanama was drawn and seizure list was also prepared during the search at the premises of M/s. EFPL; some loose sheets and two notebooks were also recovered and seized. The said documents were containing entries on different dates.
Mr. N.K. Chowdhury, representing the appellant, submitted that the entire demand has been raised on the basis of three private unauthenticated seized documents from the office of M/s. EFPL; merely because few entries tally with the statutory records it cannot be inferred that all the entries are relating to the clandestine manufacture and clearance of the goods without payment of duty.
The bench observed that there was no corroborative evidence available on record in support of the charge of clandestine removal of the goods, further held that the demand of Central Excise Duty was not sustainable against the appellant. As the demand of duty is not sustainable, consequently, no penalty can be imposed on the appellants.
The two member bench of the tribunal comprising Ashok Jindal (Judicial member) and K. Anpazhakan (Technical member) held that the demand of Central Excise Duty was not sustainable against the appellant. As the demand of duty was not sustainable, consequently, no penalty can be imposed on the appellants. Accordingly, CESTAT set aside the impugned order and allowed the appeals filed by the appellants.
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