Duty Demand on clandestine removals based on the confessional statements without corroborative evidence is not permissible, the Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held as above.
M/s Metal Gems, the appellant engaged in the manufacture of Copper and Copper Alloy articles. Searches were conducted based on intelligence that M/s Metal Gems are clearing the goods i.e. Copper wire/ Rod/ Pipe/tube without the cover of the Central Excise invoices, without payment of Central Excise Duty and without accounting for the same, in their books of accountand seized several records and documents.
The documents recovered from M/s Moongipa Roadways Pvt. Ltd. were scrutinized and it appeared that they are engaged in the transportation of the consignment of Copper Pipes/ tubes/ coils from M/s Metal Gems, Daman. They have admitted that the consignment which has been transported by them under the abbreviated names has been received by them, for transportation, without the cover of any proper duty-paying documents. They also admitted that persons of M/s Metal Gems have also been in continuous touch with the persons of the transporter for the transportation of their goods.
Based on the statements of the persons/ directors of M/s Moongipa Roadways Pvt. Ltd., the investigation was extended to buyers of the goods, which were transported by M/s Moongipa Roadways Pvt. Ltd. by showing the names of the consignors/ consignees in abbreviated form and as self. Further calculated the duty demand based on records/ register of the transporter.
Shri Ankur Upadhyay, Counsel appeared on behalf of the appellants stated that the department arrived at the demand of Central Excise Duty against the Appellant solely based onthe loading register maintained by the transporter and no incriminating evidence was found from the office premises of the Appellant.
Further contended that all the details related to the third parties without any corroborating evidence are not reliable in the eyes of law. In contra Shri Vinod Lukose, counsel for the respondentalleged that a huge quantity of finished products have been manufactured and cleared clandestinely without payment of Central Excise duty.
It was settled law that clandestine removals cannot be arrived at based upon the confessional statement of other persons or the documents recovered from the third-party premises, without corroboration of the said documents.
A Coram of Ramesh Nair, member (judicial) and Raju, member (technical) found that the department has failed to prove the allegations against the appellant and viewed that the confirmation of duty demand along with interest and penalty against the appellant without any cogent basis is invalid.
The Tribunal set aside the impugned order and allowed the appeals filed by the co-appellants.
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