2018 (1) TMI 1633 - AT - Central Excise

Dismissal of Appeal Upholding Order on Clandestine Goods; Lack of Evidence for Duty Demand

The appeal against the order in original passed by the Pr. Commissioner, Customs, Central Excise & Service tax, Bhopal regarding clandestine removal ... Clandestine removal - Cigarettes - approval of Central Excise officer for removal of cigarettes - HELD THAT:- It appears that the appellant has started its manufacturing activity in the month of June, 2008 and search was conducted in the month of October, 2008. Cigarettes are excisable items where the representative of the Excise Department has the physical control as per the Central Excise law. Thus, the Central Excise officer is posted in the factory, so, no cigarettes can go outside without his approval. The statement of the personal incharge was recorded where they accepted that plane brand cigarette was manufactured. The department has not made out any investigation from the buyers. For the so-called clandestine removal, no investigation was made out. No attempt was examined for the consumption of raw material, electricity, manpower etc. Thus, there is no proof of clandestine removal of the goods. Appeal dismissed. Issues:- Appeal against the order in original passed by the Pr. Commissioner, Customs, Central Excise & Service tax, Bhopal regarding clandestine removal of goods attracting Central Excise duty.Analysis:The appeal was filed against the order in original passed by the Pr. Commissioner, Customs, Central Excise & Service tax, Bhopal, concerning the clandestine removal of goods attracting Central Excise duty. The respondent, engaged in cigarette manufacturing, had a search conducted at its premises where material was seized, leading to the Department alleging clandestine removal and demanding duty. However, the impugned order set aside the duty demand, prompting the Department to file the present appeal.During the hearing, the appellant's manufacturing activity commencement in June 2008 was noted, with a search conducted in October 2008. As cigarettes are excisable items, the Central Excise law dictates that the Excise Department representative has physical control in the factory, ensuring no cigarettes can leave without approval. The statement of the personnel in charge indicated the manufacture of plain brand cigarettes, but no investigation was conducted with buyers or into the alleged clandestine removal. Furthermore, no examination was made regarding raw material consumption, electricity usage, or manpower, leading to a lack of evidence supporting the clandestine removal claim.Ultimately, after hearing the arguments and reviewing the records, it was concluded that the appeal filed by the Department lacked merit. As a result, the appeal was dismissed, with the judgment being dictated and pronounced in open court.