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of <h1>Appeal successful against duty demand and penalties in clandestine goods case.</h1> The appeal challenged duty demand and penalties imposed under Section 11AC and Rule 173Q, disputing allegations of clandestine goods removal. The ... Clandestine removal — on the basis of excess purchase of just one raw material, clandestine production and removal not Issues:Challenge to duty demand, penalty imposition, clandestine removal allegations, evidence evaluation, extended period invocation, parallel proceedings initiation, reliance on case laws.Duty Demand and Penalty Imposition:The appeal challenged the duty demand of Rs. 4,71,377 and penalties imposed under Section 11AC and Rule 173Q. The appellants contested the allegation of manufacturing and clearing goods clandestinely without duty payment. They argued that the calculation of production based on a single raw material, ballast covers, was flawed as it ignored other essential components and factors like the actual use of ballast covers. The appellants also disputed the assumptions made regarding the purchase value of raw materials and the utilization of funds withdrawn from the bank for various purposes, not just raw material purchase.Clandestine Removal Allegations and Evidence Evaluation:The appellants refuted the charge of clandestine removal by highlighting discrepancies in the assumptions made by the Revenue. They contested the lack of concrete evidence such as excess purchase of raw materials, receipt of clandestinely cleared goods by buyers, or abnormal electricity consumption. The appellants emphasized that investigations did not unearth any parallel set of invoices or conclusive proof of clandestine clearance. They argued that the authorities failed to consider documentary evidence like Income-tax Returns, Sales Tax Returns, and other materials, leading to a reliance on assumptions and presumptions rather than concrete proof.Extended Period Invocation and Parallel Proceedings Initiation:The judgment addressed the issue of invoking the extended period for duty demand based on alleged suppression of facts. The tribunal found that there was no evidence of intentional evasion of Central Excise duty or willful misstatement to warrant the extended period. Additionally, the initiation of parallel proceedings against the appellants after dropping earlier proceedings for the Kozhikode Unit was deemed unsustainable as it lacked legal merit and factual basis.Reliance on Case Laws:The appellants relied on various case laws, including decisions like Hilton Tobaccos Ltd. v. C.C.E. and Sapthagiri Cements Pvt. Ltd. v. C.C.E., to support their arguments against the duty demand and penalty imposition. The tribunal agreed with the appellants that the cited case laws were applicable to the present case, emphasizing the lack of substantial evidence to uphold the Order-in-Original and Order-in-Appeal. The appeal was allowed, providing consequential relief to the appellants based on the detailed evaluation of the evidence and legal arguments presented.This comprehensive analysis of the judgment from the Appellate Tribunal CESTAT, Bangalore highlights the key issues raised, arguments presented, and the tribunal's findings regarding duty demand, penalty imposition, clandestine removal allegations, evidence evaluation, extended period invocation, parallel proceedings initiation, and reliance on relevant case laws.
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