Unretracted admission and recovered delivery challans can sustain clandestine removal findings and separate director penalty.

Recovered delivery challans showing goods, consignee details and transport particulars, together with the director's un-retracted admission, were treated as sufficient evidence of clandestine removal. The department was not required to conduct further investigation, and the burden shifted to the assessee to rebut the evidence; as it failed to do so, the demand and penalty on the company were sustained. Penalty on the director under Rule 26 of the Central Excise Rules, 2002 was also upheld because he was present at recovery, admitted his role, and separate penalty on the company did not bar personal penalty where participation in the offence was shown.

---

---

Issues: (i) Whether the recovery of delivery challans coupled with the director's un-retracted admission was sufficient to sustain the demand and penalty on the assessee for clandestine removal of excisable goods. (ii) Whether penalty under Rule 26 of the Central Excise Rules, 2002 was imposable on the director.

Issue (i): Whether the recovery of delivery challans coupled with the director's un-retracted admission was sufficient to sustain the demand and penalty on the assessee for clandestine removal of excisable goods.

Analysis: The delivery challans contained particulars of the goods, consignee and transport details, and their contents were admitted. The director's statement admitting recovery of the documents and payment of duty with interest was not retracted. In such circumstances, the department was not required to undertake further investigation, and the burden shifted to the appellants to rebut the evidence, which they failed to do.

Conclusion: The demand and the penalty on the assessee were upheld.

Issue (ii): Whether penalty under Rule 26 of the Central Excise Rules, 2002 was imposable on the director.

Analysis: The director was present when the documents were recovered and had clearly admitted his role. The fact that penalty had also been imposed on the company did not preclude penalty on the director. The penalty imposed was also found to be reasonable and lenient.

Conclusion: Penalty on the director was held to be valid.

Final Conclusion: Both appeals failed on merits and the orders imposing duty and penalties were sustained.

Ratio Decidendi: An un-retracted admission, supported by recovered documents showing the movement of goods, can sustain a finding of clandestine removal, and penalty may independently be imposed on a director who is shown to have played a role in the offence.

---