Proof of fake export documents required before sustaining duty demand and penalty; unproven allegations of non-export failed.

Duty demand and penalty based on alleged false export documents could not be sustained because the Department failed to prove, with supporting evidence, that the documents used to obtain proof of export admittance certificate were fake or fabricated. A new contention advanced at hearing could not replace the factual basis required in the show-cause notice or adjudication order. In the absence of proof of bogus export documents, the allegation of non-export also failed, and the Revenue's appeals were dismissed, leaving the setting aside of duty and penalties undisturbed.

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Issues: Whether the demand of duty and penalty could be sustained on the allegation that false documents were produced to obtain proof of export admittance certificate and that the goods were not exported.

Analysis: The allegation of non-export rested on the claim that the export documents were fake. The material relied upon by the Department did not establish that the documents produced for obtaining the proof of export admittance certificate were bogus or fabricated. A new contention raised at hearing could not displace the basis of the show-cause notice or the adjudication order. In the absence of evidence proving that the export documents were false, the departmental case failed.

Conclusion: The demand and penalty were not sustainable and the appeals of the Revenue were dismissed.

Final Conclusion: The order setting aside the duty demand and penalties was upheld because the alleged fabrication of export documents was not proved.

Ratio Decidendi: A demand founded on alleged false export documents cannot be sustained unless the Department proves, with supporting evidence, that the documents were in fact fake or bogus.

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