2018 (7) TMI 1272 - AT - Central Excise

Tribunal overturns Commissioner's decision, emphasizes need for evidence in excise appeals.

The Tribunal set aside the Commissioner (Appeals) Order-in-Appeal, allowing the appeals of the manufacturer appellant and its ex-partner. The decision was ... Clandestine removal - demand based on the confessional statement of Shri Vimal Sharma - no corroborative evidences - Held that:- The original and first appellate authority have relied only on the confessional statement without having any material to corroborate the same - reliance placed in the precedent decision of this Tribunal in the case of Portland Cement (I) Ltd. [2015 (1) TMI 941 - CESTAT NEW DELHI], where it was held that in the absence of any other material to corroborate the confessional statement by the person in-charge of the business, the liability cannot be fastened on the persons. Appeal allowed - decided in favor of appellant. Issues:Appeal against Order-in-Appeal No.GZB-EXCUS-000-APP-0050-0051-17-18 dated 29.05.2017 passed by Commissioner (Appeals), Customs & Central Excise, Appeal-II, Noida.Analysis:The appeals involved in this case were directed against a common impugned Order-in-Appeal passed by the Commissioner (Appeals). The appeals were filed by a manufacturer appellant and its ex-partner. The manufacturer appellant was engaged in manufacturing articles of bathroom fittings made of brass, availing the benefit of small scale exemption. The Central Excise officers visited the factory premises and recovered loose papers and extracted data from the computer. Statements of individuals related to the appellant were recorded based on which a show cause notice was issued, demanding Central Excise duty for a specific period. The Order-in-Original confirmed the demand and imposed penalties, which were upheld by the Commissioner (Appeals). The appellant challenged this decision before the Tribunal.The appellant's counsel argued that the loose papers were not relied upon for issuing the show cause notice, and the authorities did not consider any evidence apart from a confessional statement. It was contended that the Revenue failed to conduct investigations with suppliers or purchasers of goods to establish the duty liability. The burden of proof was emphasized to be on the Revenue to demonstrate that the goods were manufactured by the appellant. Reference was made to a Tribunal's previous ruling and a High Court case to support the argument that liability cannot be solely based on a confessional statement without corroborating evidence.The Assistant Commissioner (AR) supported the impugned Order-in-Appeal during the hearing. Upon considering the arguments and examining the records, the Tribunal found that the authorities had solely relied on the confessional statement without any corroborating material. Citing a precedent decision, the Tribunal concluded that the impugned order was not sustainable. Consequently, the Tribunal set aside the Order-in-Appeal and allowed both appeals, granting the appellants consequential relief as per the law.In conclusion, the Tribunal's decision was based on the lack of corroborating evidence to support the confessional statement, emphasizing the importance of substantiating liability with material evidence. The judgment highlights the necessity for thorough investigation and proof to establish duty liability, ensuring fairness and adherence to legal principles in excise matters.