2009 (1) TMI 661 - AT - Central Excise

Tribunal overturns duty confirmation & penalties, grants relief to appellant in M/s. Bhandary Industrial Metals case

The Appellate Tribunal CESTAT, Mumbai, set aside the impugned order in the case involving M/s. Bhandary Industrial Metals Pvt. Ltd. against the ... Clandestine removal - Evidence - Appreciation of - Cenvat/Modvat - penalty - Held that: - It is well-settled that the charges of clandestine removal are required to be established by the revenue by production of positive and tangible evidence. Entries made in records of 3rd party cannot be made the basis for upholding such charges. The Appellate Tribunal CESTAT, Mumbai, represented by Ms. Archana Wadhwa and Shri K.K. Agarwal, JJ., recently issued a judgement in 2009 (1) TMI 661 - CESTAT, Mumbai. The case involved M/s. Bhandary Industrial Metals Pvt. Ltd. against the Commissioner, where duty of Rs. 35,82,394/-, BED, and Rs. 1,06,344/-, SED, were confirmed due to alleged clandestine removal. Modvat credit of Rs. 12,15,412/- was denied based on the use of duplicate invoices. Penalties of Rs. 6,25,000/- were imposed on two registered dealers under Rule 173Q(1)(bbb). The tribunal heard arguments from both sides and found that the charges of clandestine removal were not adequately supported by evidence. The evidence primarily relied on entries in a register maintained by a third party, which was deemed insufficient to prove the allegations. The tribunal also noted procedural lapses in the denial of Modvat credit and found no justifiable reason to penalize the appellants or the registered dealers. Consequently, the impugned order was set aside, and all appeals were allowed with relief to the appellants. The judgement was pronounced on 20-1-2009.