Third-Party documents alone not sufficient to prove charge of Clandestine Removal: CESTAT [Read Order]

Third-Party documents alone not sufficient to prove charge of Clandestine Removal: CESTAT [Read Order]

Clandestine Removal - CESTAT - Taxscan

The Customs Excise and Service Tax Appellate Tribunal(CESTAT), Delhi bench has recently quashed an order confirming the charge of clandestine removal for lack of clinching evidence of clandestine manufacture and removal of goods.

The Appellant M/s.Recon Steel & Power Private Ltd. was among the raw material suppliers of M/s Hari Om Ingots and Power Limited, which was charged for clandestine removal. The appellant along with other suppliers was alleged to have resorted to wilful and intentional evasion of Central Excise duty to facilitate M/s Hari Om Ingots and Power Limited and hence was levied with a penalty. The appeals filed by M/s Hari Om Ingots and Power Limited and certain other noticees challenging the said action were adjudicated by the Tribunal as against the department, by holding that the charge of clandestine removal was not backed by clinching evidence but mere third party documents.

“It is also apparent that the shortage was detected on the basis of eye estimation and on average weight basis without any physical weighment, demand cannot be confirmed on the said basis. Above all present is the case of third party evidence,” the Tribunal observed.

Adhering to the findings made in the appeal filed by Noticee No.1, viz, M/s Hari Om Ingots and Power Limited and following the dictum in case of Bajrangbali Ingots & Steel Pvt. Ltd. & Suresh Agarwal vs. CCE, Raipur regarding the evidentiary value of third party evidence, the order imposing a penalty on the Appellant was set aside by the Single Bench comprising Mrs.Rachana Gupta.

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