2016 (4) TMI 544 - HC - Central Excise

High Court affirms Tribunal's decision on duty evasion case, emphasizes need for credible evidence

Principal Commissioner of Central Excise Versus M/s Rukmini Steel Industries Ltd.

The High Court upheld the Tribunal's decision in a case involving duty evasion allegations. The Tribunal found the Revenue's evidence insufficient to ... Clandestine removal of goods - Tribunal held that there is no evidence to prove clandestine removal without going into the various corroborative evidences submitted by Revenue - Held that:- the record is fully examined by the Tribunal and thereafter appreciated and ultimately has found that the Revenue has failed to discharge the burden and under the circumstances the appeal of the Revenue was dismissed. As such, whether there was any clandestine removal of the goods, is essentially a question of fact. - Decided against the revenue Issues:1. Whether Tribunal justified in holding no evidence for clandestine removal based on Order-In-OriginalRs.2. Whether Register No.7 is sufficient evidence for duty evasionRs.Analysis:1. The appellant-Revenue raised questions on the Tribunal's decision regarding clandestine removal evidence. The Tribunal found Revenue's case solely based on entries in a private Register without proper investigation. The Register's author was not contacted, and statements of other persons were not incriminating. The Tribunal emphasized the need for tangible evidence to prove clandestine removal, which was lacking. The Tribunal also highlighted the failure to cross-examine relevant persons and lack of inculpatory statements. The Tribunal concluded that charges cannot be upheld solely based on Register entries without corroborative evidence.2. The Tribunal examined the Register entries and found discrepancies in the goods cleared under trading invoices of non-existent companies. The appellant contested this by claiming the goods were different from what they manufactured. The Tribunal noted the absence of evidence to rebut the findings and upheld the adjudicating authority's conclusions. Additionally, the Tribunal considered power consumption data and found no evidence of excess manufacture of goods. The Tribunal emphasized the necessity of evidence inspiring confidence in the Revenue's case, which was lacking in this scenario.3. The High Court dismissed the appeal, stating that the Tribunal thoroughly examined the record and found the Revenue failed to discharge the burden of proof. The Court highlighted that determining clandestine removal and burden discharge are factual inquiries requiring evidence evaluation. No substantial legal questions were identified in the appeal, as the issues primarily pertained to factual assessments rather than legal interpretations. Consequently, the Court upheld the Tribunal's decision and dismissed the appeal.