2018 (4) TMI 224 - AT - Central Excise

Appeal rejected due to lack of evidence from third-party records alone. Matter remanded for fresh adjudication.

The Revenue's appeal against the order setting aside the demand confirmation was rejected by the Tribunal based on precedent disallowing the use of ... Clandestine manufacture and removal - sponge iron - shortage of goods - demand based on third party records - Held that: - The Tribunal in the case of C.C.E. & S.T. -Raipur Versus P.D. Industries Pvt. Ltd. [2015 (11) TMI 455 - CESTAT NEW DELHI], observed that the records retrieved from the transporters, being third party’s records, cannot be adopted as the sole ground for upholding the allegations of clandestine removal. As regards the appeal of the assessee, the identical appeals of the other assessees stand remanded by the Tribunal for fresh adjudication. Appeal allowed by way of remand. Issues:Revenue's appeal against the order setting aside the demand confirmation. Respondent's cross objection regarding the confirmed demand.Analysis:The case involved a dispute where the Revenue challenged the order of the Commissioner (Appeals) setting aside the confirmation of demand against the respondent. The respondent, engaged in the manufacture of Sponge Iron, was accused of clearing goods without paying duty based on intelligence gathered during searches at the premises of a Commission Agent and transporters. The Original Adjudicating Authority confirmed a demand of Rs. 13,07,896 against the respondent. However, on appeal, the Commissioner (Appeals) differentiated between the quantities based on records from the Commission Agent and transporters, upholding a demand of Rs. 1,47,457 and setting aside the rest due to lack of corroborative evidence.The Revenue's appeal contended that the investigations were similar to previous cases where the Tribunal rejected the use of third-party records as the sole basis for allegations of clandestine removal. Citing a specific case, the Tribunal had ruled against adopting transporter records alone for confirming demands. Consequently, the Revenue's appeal was rejected based on the precedent set by the Tribunal in a previous case.Regarding the respondent's appeal, the Tribunal noted that similar appeals by other assessees were remanded for fresh adjudication. Referring to specific cases, the Tribunal decided to remand the matter to the Original Adjudicating Authority following the precedent set in those cases. Therefore, the respondent's appeal was allowed to that extent, aligning with the decisions in the mentioned cases.In conclusion, both the Revenue's appeal and the respondent's cross objection were disposed of accordingly, with the Revenue's appeal being rejected based on the Tribunal's previous ruling and the respondent's appeal being allowed to the extent of remanding the matter for fresh adjudication.