2006 (10) TMI 59 - AT - Central Excise

Tribunal allows appeals in sugar duty case due to lack of evidence and time-barred demands.

SHREE RENUKA SUGARS LTD. (SRSL) Versus COMMISSIONER OF C. EX., BANGALORE

The Tribunal allowed the appeals in a case involving alleged clandestine removal of sugar without duty payment. The Commissioner failed to provide ... Demand – limitations – alleged that appellant is clandestine removal of sugar without payment of duty revenue as a evidence submits security register maintained by private detective agent after considering the evidence by authority. Issues:- Alleged clandestine removal of sugar without payment of duty- Evidence based on security register maintained by private detective agent- Lack of evidence of excess manufacture, clearances, electricity consumption, raw materials, transporters, and buyers- Consideration of waiver of full pre-deposit of duty amount- Tribunal's consideration of lack of evidence by Revenue and time-barred demands- Commissioner's contention on security staff's admission as conclusive evidence- Opposition by Counsel citing Tribunal judgments on clandestine removal- Lack of preponderance of probability in the case- Failure to discharge burden of allegation by Revenue- Consideration of witness statements in favor of appellantAnalysis:The appeal arose from an Order confirming demands for alleged clandestine removal of sugar without duty payment based solely on a security register maintained by a private detective agent. The Tribunal noted the lack of evidence from Revenue to substantiate the charge, also considering the demands time-barred due to delayed show cause notice issuance after 871 days. The Commissioner contended that security staff admissions should be conclusive evidence, but the Counsel opposed, citing Tribunal judgments that private records alone are insufficient for proof. The Counsel highlighted the absence of necessary links in circumstantial evidence and the failure to meet basic requirements to discharge the burden of allegation.The Tribunal found that the Commissioner failed to provide clinching evidence for clandestine removal charges, emphasizing the lack of evidence regarding excess production, raw material utilization, transporters, buyers, and flow back of funds. The investigation delay of over 800 days rendered the demands time-barred, in line with cited Apex Court judgments. Numerous Tribunal cases were referenced to support the decision that demands must be supported by evidence and not time-barred. Considering the lack of evidence and time-barred demands, the impugned order was deemed unsustainable, and the appeals were allowed with consequential relief, if any.