The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand of Customs Duty of approximately 2.5 crores for the clandestine removal of goods on the ground of the absence of corroborative evidence.
Asian Plywood Industries Private Limited, the appellant assessee was engaged in the manufacturing and trading of plywood, flush doors, and blackboard.
The assessee appealed against the order passed by the Commissioner to confirm the demand for Customs Duty along with a penalty.
Ankit Kanodia, the counsel for the assessee contended that the documents seized by the investigating team from the residence of the accountant cannot be the primary evidence to claim the allegation of clandestine removal as the same was not corroborated by cogent evidence.
Further submitted that the department had to undertake an examination of various persons, who are part of such removals, such as transporters, customers, etc, and in this case, the department had not proceeded with any investigation to that effect.
A.Roy, the counsel for the department contended that the case had been made out based on documents recovered from the residential premises of the accountant of the assessee, who had stated how the Books of Account are being maintained for the manufacturing activity of the assessee and based on those records, the case had been made out of clandestine removal.
The Bench observed that the clandestine manufacture and removal of excisable goods was to be proved by tangible, direct, affirmative, and incontrovertible evidence, and the department failed to examine all the aspects relating to the clandestine removal of goods and there was no corroborating evidence relating to the clandestine removal of goods by the assessee.
The two-member bench comprising Ashok Jindal (Judicial) and K.Anpazhakan (Technical) quashed the demand of Customs Duty while allowing the appeal filed by the assessee.
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