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of <h1>Tax Department appeal denied due to lack of evidence for clandestine removal, ruling in favor of respondent.</h1> The Department's appeal against the order for recovery of interest and penalty under section 11AC was rejected. The Appellate Tribunal found that while ... Penalty and interest - Clandestine removal of inputs On a departmental appeal against setting aside recovery of interest and penalty under Section 11AC, officers found a shortage of 48 MT iron and steel scrap (value Rs.4,56,000; Cenvat credit Rs.72,960). The proprietor admitted the shortage and reversed credit on 29-11-00 (Rs.32,960) and paid Rs.40,000 on 30-11-00. The original authority confirmed demand, imposed penalty equal to the credit and ordered interest; the Commissioner (Appeals) set aside penalty and interest. The Tribunal found that although shortage was admitted, an admission of 'clandestine removal' was recorded only on 4-10-01 after two earlier statements which did not accept clandestine removal. A conclusion of clandestine removal 'requires to be corroborated' and here 'no corroborative evidence to confirm the statement dt. 4-10-01 is available.' Consequently, the Tribunal did 'not find ingredients of provisons of Section 11AC.' As credit was reversed on the date of visit, interest demand could not be sustained. The departmental appeal was rejected.
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