Tribunal rules in favor of appellant due to lack of evidence in clandestine removal case.

The Tribunal set aside the impugned order, ruling in favor of the appellant in a case involving allegations of clandestine removal of sponge iron. The decision was based on the lack of substantial evidence linking the appellant to the alleged clandestine activity, as investigations against the company supplying the sponge iron had been set aside. The Tribunal emphasized the necessity of tangible evidence to support charges of clandestine removal, ultimately leading to the favorable outcome for the appellant.

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Issues: Allegation of clandestine removal of sponge iron leading to duty demand, penalty imposition, and appeal against Order-in-Original.

Analysis:
1. The appellant, engaged in manufacturing iron and steel products, faced allegations of receiving clandestinely cleared sponge iron from another company, leading to duty demand, penalty imposition, and an appeal against Order-in-Original No. 81/2017 dated 14.12.2017.

2. The Department alleged that about 32,000 metric tonnes of sponge iron were clandestinely cleared to the appellant by another company, based on investigations against that company. The appellant's Senior Manager admitted receiving this sponge iron and using it in manufacturing finished products cleared unaccounted. A Show Cause Notice was issued proposing a duty demand of Rs. 12,12,73,187/- along with interest, and penalties were imposed on the appellant's Director under Rule 26.

3. During the appeal, the appellant argued that since the case against the company clearing the sponge iron was set aside in a separate appeal, and no detailed investigation was conducted at the appellant's premises, the impugned order should be set aside. The Department supported the impugned order.

4. The Tribunal noted that the entire case against the appellant stemmed from the investigations against the other company, and no substantial investigation was conducted against the appellant apart from a statement from the Senior Manager. As the case against the other company was set aside, the Tribunal held that the appellant cannot be held solely based on the confessional statement.

5. The Tribunal emphasized that a charge of clandestine removal must be supported by tangible evidence, which was lacking in this case. Without detailed supporting evidence, the charge of clandestine removal could not be upheld as per established legal principles.

6. Consequently, the Tribunal set aside the impugned order, allowing the appeals in favor of the appellant. The decision was dictated in open court on 24.05.2018 by the Tribunal members, Mr. V. Padmanabhan and Ms. Rachna Gupta.

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