The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed excise duty on galvanized zinc as there was no tangible evidence to prove clandestine removal beyond doubt.
the appellant company are engaged in the manufacture and clearance of armoured wires/ armoured strips. They were registered with the Central Excise Department and were paying Central Excise Duty. Apart from manufacturing aforesaid final product, the appellant also used to undertake job work activities for which they used to receive wires from other principal manufacturers.
On the said goods the appellant used to perform job work of carrying out the process of galvanizing. After galvanizing with zinc, the said MS- wires were returned back under Annexure VI challan respectively by the appellant to the said principal manufacturers.
Devashish Trivedi, Counsel appearing on behalf of the Appellant submitted that even if the allegation are believed to be true the principal manufacturers who has sent MS wires for carrying out the process of galvanizing on job work basis is the real manufacturer for the purpose of central excise duty liability. Demand on galvanized wire cannot be made on the appellant herein who is just a job worker.
The counsel further submitted that there is absolutely no investigation at the end of alleged buyers of clandestinely cleared goods or alleged transporters who have transported clandestinely cleared goods. There is no investigation in regard to cash flowback etc and that witnesses whose statements were recorded, cross- examination of them was not allowed. Therefore, the statements cannot be relied upon.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the present case there is no evidence of clandestine clearance of galvanized MS wires from the factory of the appellant being a job worker. No investigation has been carried out with the transporter, not a single buyer was brought on record who allegedly purchased the clandestinely removed goods. There is absolutely no evidence of any payment received against the alleged clandestine removal.”
“Therefore, in our considered view there is no tangible evidence to prove the clandestine removal beyond doubt. Therefore, we set aside the demand, interest and penalties. Since the demand of the main appellant manufacturer is not sustained, the penalties on other persons which are consequential to the demand of duty from the main appellant, shall also not sustain” the Bench concluded.
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