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of <h1>Tribunal overturns duty demand based on lack of evidence, stresses need for concrete proof</h1> The Tribunal set aside the order confirming the duty demand and penalties imposed on the Appellant and the Authorised Signatory, citing insufficient ... Clandestine manufacture of goods and cleared without payment of duty - duty demand - Held that:- In the present case, the Revenue proceeded on the basis of theoretical calculation of the input-output ratio and alleged the clandestine removal of the goods. The appellant particularly furnished the documents of gas consumption. No attempt was made to verify the physical stocks and the said documents. On perusal of the impugned order, it is seen that the adjudicating authority observed that he has found enough reason to presume manufacture and clearance of final products from the raw material. Thus, the demand of duty was confirmed on the basis of presumption and assumption, without any evidence. Hence, the demand of duty alongwith interest and penalty on the appellants cannot be sustained. - Decided in favour of assessee Issues:Alleged clandestine manufacturing and clearance of goods without payment of duty, imposition of penalty on the Appellant and the Authorised Signatory, confirmation of demand of duty, reliance on statutory records and statements, sufficiency of evidence, theoretical calculation basis for demand of duty, verification of physical stocks, adherence to legal precedents.Analysis:Alleged Clandestine Manufacturing and Clearance of Goods:The case involved allegations of clandestine manufacturing and clearance of goods without payment of duty by M/s Manav Metal Industries. The Central Excise Officers visited the factory and observed production activities, leading to the demand of duty amounting to Rs. 10,58,795.00. The Appellant denied the allegations, arguing that the demand was based on theoretical calculations without concrete evidence of clandestine removal.Imposition of Penalty:The Adjudicating authority confirmed the demand of duty and imposed penalties on both the Appellant and the Authorised Signatory. The Commissioner (Appeals) upheld this decision. However, the Appellant contested the penalties, citing legal precedents and lack of substantial evidence to support the allegations.Confirmation of Demand of Duty:The demand of duty was based on the presumption of manufacture and clearance of final products from raw materials. The Appellant provided documentation regarding gas consumption, but no physical stock verification was conducted. The Tribunal found the demand unsustainable due to lack of concrete evidence supporting the allegations.Reliance on Statutory Records and Statements:The Central Excise Officers relied on statutory records and statements recorded from the Authorised Signatory during their visits to the factory. However, the Appellant argued that the statements did not admit clandestine removal, and the demand was primarily based on theoretical calculations rather than verified data.Sufficiency of Evidence and Theoretical Calculation:The Tribunal emphasized the importance of concrete evidence to support allegations of clandestine activities. The demand of duty solely based on theoretical calculations without verifying documents like gas consumption and physical stocks was deemed insufficient to establish clandestine removal.Verification of Physical Stocks:The Tribunal noted the absence of stock verification by the Central Excise Officers, highlighting the necessity of verifying physical stocks and consumption data before imposing duty demands. The lack of verification raised doubts about the validity of the allegations.Adherence to Legal Precedents:The Tribunal referenced various legal precedents where the burden of proving clandestine removal rested on the Revenue, requiring tangible evidence beyond mere shortages or theoretical calculations. In this case, the Tribunal found the demand unsustainable due to the absence of concrete proof supporting the allegations.In conclusion, the Tribunal set aside the impugned order, allowing the appeals filed by the Appellants and dismissing the applications for extension of stay order as infructuous. The judgment emphasized the importance of substantial evidence and proper verification procedures in cases involving allegations of clandestine activities to uphold the principles of natural justice and legal precedents.
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