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of <h1>Excise demand under Section 11A invalid without corroboration to retracted Section 14 statement and stock verification</h1> HC dismissed the revenue's appeal, upholding orders of the adjudicating authority and appellate forums that set aside the excise duty demand under Section ... Clandestine removal illicitly of excisable goods and evasion of Central Excise duty - no evidence to support the charge - statement recorded u/s 14 - no corroborative evidence - demand u/s 11A - Shortage of fabrics - Stock not verified physically while drawing panchnama - Director of the assessee-Company submitted an affidavit wherein it was clearly mentioned that the stock verification was not conducted physically and was not compared with the recorded balance thereof - statement of Director subsequently retracted - HELD THAT:- It is apparent that the only evidence in respect of clandestine removal against the assessee was in the nature of the statement recorded under Section 14 of the Act, which had been subsequently retracted. Before the adjudicating authority, the respondent assessee had led evidence to establish that the charge of clandestine removal is not made out and that there was no shortage of material as recorded in the panchnama which was accepted by the adjudicating authority. The findings of the adjudicating authority stand confirmed by both the appellate authorities. Learned counsel for the appellant is not in a position to point out any evidence to the contrary, in support of the case of the revenue as regards shortage of material or clandestine removal of goods. Thus, the conclusion arrived at by the Tribunal is based solely upon concurrent findings of fact recorded by all the authorities below. In absence of any perversity being pointed out in the findings recorded by the Tribunal, it is not possible to state that the conclusion arrived at by the Tribunal is, in any manner unreasonable so as to warrant interference. A case of clandestine removal of goods has to be made out on facts which find corroboration from the material on record. In absence of any corroborative material, no demand could have been raised merely on the basis of a statement recorded under Section 14 of the Act, which had been subsequently retracted. In absence of any question of law, much less, a substantial question of law, the appeal is dismissed. Issues:1. Interpretation of Section 14 of the Central Excise Act regarding the need for further corroborative evidence in cases of admitted illicit removal of excisable goods.2. Justifiability of dropping the demand for Central excise duty based on the evidence presented.3. Requirement of corroborative evidence to establish clandestine removal of goods and evasion of Central Excise duty.Issue 1:The appeal under Section 35G of the Central Excise Act challenged the Tribunal's order regarding the interpretation of Section 14 of the Act. The appellant contended that once admission of illicit and clandestine removal of excisable goods was made under Section 14, no further corroborative evidence was necessary. However, the Tribunal's decision raised questions about the need for additional evidence to support such admissions.Issue 2:The case involved a search of a factory premises leading to the detection of a shortage of processed fabrics, indicating possible clandestine removal of goods. The appellant argued that the admission of clandestine removal in the statement recorded under Section 14 should have been sufficient to demand Central excise duty. Despite the admission, the adjudicating authority dropped the duty demand, a decision upheld by the Commissioner (Appeals) and the Tribunal.Issue 3:The Tribunal, along with the lower authorities, found that apart from the retracted statement of the company's director, there was no corroborative evidence supporting the charge of clandestine removal of goods. The director's retraction raised doubts about the reliability of the initial admission. The authorities emphasized the need for tangible, concrete evidence to establish clandestine removal, which was lacking in this case. The absence of corroborative material led to the dismissal of the appeal, as no substantial question of law was identified to warrant interference with the concurrent findings of fact.In conclusion, the judgment highlighted the importance of corroborative evidence in cases of clandestine removal of goods for establishing liability under the Central Excise Act. The decision emphasized the significance of tangible proof beyond mere admissions, especially when initial statements are retracted. The dismissal of the appeal underscored the requirement for substantial legal questions to challenge lower authorities' findings based on the evidence presented.
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