Supreme Court sets aside High Court order on Polyester Texturised Yarn removal, emphasizes need for independent verification

The Supreme Court allowed the appeal, setting aside the High Court's order regarding clandestine removal of Polyester Texturised Yarn. The Court emphasized the insufficiency of relying solely on the statement of the authorized officer without independent verification. The matter was remitted back to the tribunal for the Revenue to submit a technical report and additional evidence, with instructions not to insist on pre-deposit of dues for the appeal hearing. The appeals were allowed, and the case was remitted for further examination without costs awarded.

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Issues:
1. Legal acceptability of the common order dated 14.07.2010 passed by the High Court of Judicature for Gujarat at Ahmedabad disposing Tax Appeal Nos.1410-1412 of 2009.

Analysis:
The Supreme Court granted leave to appeal the common order of the High Court concerning the clandestine removal of Polyester Texturised Yarn (PTY). The High Court agreed with the Customs Excise and Service Tax Appellate Tribunal's (CESTAT) view that there was no clandestine removal based solely on the statement of the authorised officer of the respondent. The tribunal's decision relied on the technical opinion of a chartered engineer submitted by the respondents, and the revenue's case was primarily built on the authorised officer's statement without independent verification. The Supreme Court noted that such reliance on a single statement without additional evidence was insufficient for acceptance.

The respondents argued that they provided a technical opinion from a chartered engineer, which the High Court accepted, showing no differential quantity to support the claim of clandestine removal. However, the Supreme Court emphasized that the revenue should have had the opportunity to contest this technical report by submitting its own, especially since the issue of clandestine removal hinged on the presence of a differential quantity. Consequently, the Supreme Court set aside the High Court and tribunal orders, remitting the matter back to the tribunal to allow the Revenue to file a technical report and present further evidence if necessary. The tribunal was instructed not to rely solely on the authorised officer's statement and to disregard any insistence on pre-deposit of dues for the appeal hearing.

In conclusion, the appeals were allowed to the extent of setting aside the previous orders and remitting the matter for further examination. No costs were awarded in this case.

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