2015 (5) TMI 738 - AT - Central Excise

Tribunal Upholds Commissioner's Order, Emphasizes Need for Substantial Evidence in Duty Evasion Cases

Commissioner of Central Excise, Chennai -II Versus M/s. Rawf Re-Rollers

The Tribunal upheld the Commissioner (Appeals) order, rejecting all three appeals filed by the Revenue. It emphasized the necessity of substantial ... Clandestine removal of goods - evasion of duty - Held that:- department had demanded excise duty on MS. Rounds, alleging that the respondents have clandestinely removed the goods by relying on the oral statements and without any corroborative evidence either from the respondents premises or from the Customer, Trader's documents etc. Therefore, we find that the Commissioner (Appeals) has discussed issues at length and has given a detailed order while setting aside the order of the adjudicating authority. By respectfully following the Hon'ble High Court judgment [2008 (9) TMI 603 - PATNA HIGH COURT ], we hold that there is no infirmity in the impugned order. - Decided against Revenue. Issues involved:1. Allegation of clandestine removal of M.S. Rounds without duty payment.2. Imposition of penalties on the appellants and others.3. Lack of corroborative evidence to support the allegations.4. Requirement of clear evidence to establish clandestine clearance and duty evasion.5. Application of judicial pronouncements on proving clandestine manufacture and removal of excisable goods.Detailed Analysis:1. The case involved allegations of clandestine removal of 830.633 MTs of MS Rounds without duty payment by M/s. Rawf Re-rollers. The investigating officers conducted a search and recorded statements, leading to the imposition of penalties on the appellants and others. The adjudicating authority confirmed the demand and penalties under relevant sections of the Act.2. The Ld. AR for the appellants argued that the demand was based on admitted statements and reiterated the grounds of appeal. The respondents did not appear for a personal hearing despite multiple opportunities. The penalties were imposed on various individuals associated with the company.3. The Revenue appealed against the Commissioner (Appeals) order, citing lack of corroborative evidence for the clandestine removal allegations. The Lower Appellate Authority had set aside the adjudication order based on this issue.4. The Tribunal noted that while statements were recorded, there was a lack of concrete evidence to link the allegations of illicit removal of M.S. Rounds to duty evasion. The Revenue's case relied heavily on statements without supporting documentation or financial records.5. The Tribunal referred to established legal principles requiring Revenue to prove clandestine manufacture and removal beyond doubt. Citing judicial pronouncements, the Tribunal emphasized the need for clear, corroborated evidence to establish evasion of excise duty. The judgment highlighted the importance of concrete proof in cases of alleged duty evasion.6. Ultimately, the Tribunal upheld the Commissioner (Appeals) order, finding no infirmity in the decision. By following legal precedents and principles, the Tribunal rejected all three appeals filed by the Revenue, emphasizing the necessity of substantial evidence to prove allegations of clandestine removal and duty evasion.