Clandestine removal proved by corroborated weigh-bridge records; separate Rule 209A penalty declined where the party faced separate proceedings.

Third-party weigh-bridge records, when corroborated by witness statements, matched clearance entries, excess quantities, seizure and shortage evidence, were treated as sufficient proof of clandestine manufacture and removal of excisable goods, sustaining duty, interest and penalty against the ingot manufacturers. Separate penalty under Rule 209A was not maintained against a company alleged to have bought non-duty-paid goods, because it had already been proceeded against separately for manufacture and removal from unaccounted material, making additional penalty unnecessary. The result was partial allowance of the batch: revenue succeeded in the supplier matters and failed in the penalty matters against the company.

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Issues: (i) whether the records maintained by a third party weigh-bridge, read with surrounding circumstances and witness statements, were sufficient to prove clandestine manufacture and removal of excisable goods and consequent duty demand against the ingot manufacturers; (ii) whether separate penalty under Rule 209A of the Central Excise Rules, 1944 was warranted against MSRMPL, a company, for buying non-duty-paid goods.

Issue (i): Whether the third-party weigh-bridge records proved clandestine removal and duty liability.

Analysis: The records of the weigh-bridge were not treated as isolated documents. They were supported by statements of persons managing the weigh-bridge, matching entries for accounted clearances, excess quantities found in some consignments, seizure and shortage evidence, and the admitted clandestine activity of the downstream manufacturer. The absence of cross-examination at the adjudication stage and the corroborative material distinguished the case from authorities where third-party records had been discarded for want of support. The demand of duty, along with consequential interest and penalty, was therefore restored against the ingot manufacturers.

Conclusion: The clandestine manufacture and removal were held proved, and the duty demands against the ingot manufacturers were restored.

Issue (ii): Whether separate penalty under Rule 209A of the Central Excise Rules, 1944 should be sustained against MSRMPL.

Analysis: Although the receipt of non-duty-paid inputs was alleged against MSRMPL, the Tribunal declined to maintain separate penalties in these matters because the company had already been proceeded against separately for manufacture and removal of rolled products from unaccounted material. In the circumstances, additional penalties for purchase of non-duty-paid material were considered unnecessary.

Conclusion: Separate penalty under Rule 209A was not sustained against MSRMPL in the twenty appeals.

Final Conclusion: The revenue appeals succeeded against the ingot manufacturers and failed against MSRMPL, resulting in a partial allowance of the batch with restoration of duty demands in the four supplier appeals and rejection of the twenty penalty appeals.

Ratio Decidendi: Third-party records can sustain a demand for clandestine removal when they are corroborated by surrounding evidence and witness statements, and additional penalty proceedings may be declined where the party has already been separately proceeded against for the principal offence.

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