The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed excise duty demand thereby observing that mere factum of two set of invoices not sufficient to prove clandestine removal.
A show cause notice alleging that the appellant has cleared the goods on the strength of parallel invoices. Some demands sought to be confirmed on the basis of the documents recovered during the course of investigation. The matter was contested by the appellant, but adjudication order was passed confirming the demand proposed in the show cause notice along with interest and penalties on both the appellants were imposed. Against the said order, the appellants are before the Tribunal.
The Counsel for the appellants submitted that demand has been raised against the appellants on the basis of alleged three parallel invoices and some rough papers seized during the course of investigation and statements of the employees of the appellants and that no investigation was conducted at the end of the buyer mentioned in those parallel invoices nor any investigation was conducted with the transporter through whom they have transported the goods or not.
It was also submitted that no cross-examination of the employees was given to the appellants and there is a contradiction in the statement of the employees and the Managing Director, in that circumstances, without cross-examination it cannot be concluded that it is a case of clearance of goods without payment of duty or clearance of goods on the strength of parallel invoices, nor any enquiry was made to corroborate the documents recovered during the course of investigation, in that circumstances, the demands against the appellants are not sustainable. Consequently, no penalty is imposable on the appellant.
On the other hand, the Authorized Representative for the department supported the impugned order and submitted that it is the case where the parallel invoices were recovered during the course of investigation which was admitted by the employees of the appellants, who were looking after the business of the appellants, therefore, demand is rightly confirmed and penalties are rightly imposed on the appellants.
A Single Member Bench of Ashok Jindal, Judicial Member observed that “Without corroboration of the corroborative evidence, the demand cannot be raised against the appellant when appellant has denied the said charge during the course of investigation. Moreover, this Tribunal in the case of S.K.V. Chemicals vs. Commissioner of Central Excise, Pondicherry, held that mere factum of two set of invoices is not sufficient to prove the charge of clandestine removal in the absence of positive evidence with regard to the same.”
“Admittedly in the case at hand no investigation was conducted at the end of the buyers mentioned in the invoices and transporter of the goods. In the absence of the same, the demand cannot be raised against the appellants. Therefore, I set aside the impugned demand raised against the main appellant and penalty imposed on both the appellants” the Tribunal added.
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