Tribunal overturns demand order due to lack of evidence, discrepancies in Revenue's case

The Tribunal set aside the order confirming a demand against the appellants for allegedly issuing non-duty paying invoices, citing lack of substantial evidence linking the invoices to clandestine removal of goods. Discrepancies in the Revenue's evidence, including retracted statements and unconfirmed deliveries, led the Tribunal to conclude that the charge was unproven. The appeals were allowed with consequential relief, emphasizing the absence of supporting factors like increased electricity consumption or raw material procurement.

---

---

Issues: Allegation of clandestine removal of goods based on non-duty paying invoices and inflated sales figures.

Analysis:
1. The appellants appealed against an order confirming a demand of Rs. 22,60,000 along with interest and penalty for allegedly issuing non-duty paying invoices during an investigation at their factory premises.
2. The investigation revealed discrepancies, including the issuance of certain invoices without duty payment, leading to suspicion of clandestine removal of goods by the appellants.
3. The appellant denied clearing any goods against the disputed invoices, claiming they were created to inflate sales figures for obtaining bank loans, with no incriminating statements made.
4. The Revenue relied on evidence like inflated sales figures submitted to banks, non-duty paying invoices, and a statement from an individual named Shri Mahesh Tiwari to support the demand confirmation.
5. The Tribunal found discrepancies in the Revenue's evidence, noting that the consignee mentioned on the invoices confirmed not receiving any goods, and Shri Mahesh Tiwari's statement was retracted the next day.
6. The Tribunal emphasized the lack of substantial evidence linking the non-duty paying invoices to clandestine removal, highlighting the absence of supporting factors like electricity consumption, raw material procurement, labor increase, or money flow back.
7. Citing a precedent, the Tribunal concluded that the charge of clandestine removal was unproven, setting aside the impugned order and allowing the appeals with consequential relief, if any.

---