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of <h1>Tribunal sets aside order in appellant's favor due to lack of evidence.</h1> The Tribunal ruled in favor of the appellant, setting aside the order confirming a demand for clandestine removal of goods. The appellant's arguments ... Clandestine manufacture and removal - it was alleged that the appellant have received formaldehyde as input from the supplier without payment of duty and the same has been used in manufacture of their final product plywood/ply board which has been cleared clandestinely - Held that:- The Revenue has failed to establish from where the appellant has received other inputs and no any stock taking to that effect has been done to ascertain the truth, merely ,on the basis of the statement of third party or the documents recovered from the possession of the third party the case has been made out against the appellant that they have received one of the inputs clandestinely and manufactured of the final product which has been cleared clandestinely - the charge of clandestine manufacture and removal of the goods is not sustainable, merely, on the basis of the receipt one of the raw material, on the basis of the statement of the third party - demand set aside. Cross-examination not granted - principles of natural justice - Held that:- On the weighment slip, the name has been written of the appellant in handwriting, but the Revenue has failed to establish that who has written the appellant’s name on weighment slip. In the absence of the said evidence the weighment slip relied by the Revenue is not admissible - the Revenue has relied upon the statement of one of the alleged manufacturer of said goods who stated that they have cleared goods clandestinely to the appellant without payment of duty but no examination in chief of the statement of supplier has been done by the adjudicating authority and no cross examination of the said witnesses has been granted to the appellant - the charge of clandestine removal is not sustainable. The Revenue has failed to prove the charge of clandestine manufacture goods by the appellant - appeal allowed - decided in favor of appellant. Issues:- Demand confirmation along with interest and penalty for clandestine removal of goods.- Allegation of receiving formaldehyde without payment of duty and clandestinely clearing final products.- Failure to establish procurement of other raw materials.- Lack of cross-examination of witnesses and procedural irregularities.Analysis:1. The appellant appealed against an order confirming a demand of Rs. 23,50,429/- with interest and penalty for clandestine removal of goods. The case involved the appellant's alleged receipt of formaldehyde without duty payment and clandestine clearance of final products. The appellant argued that no incriminating evidence was found during the investigation and no inculpatory statements were recorded. They contended that the Department failed to establish the procurement of other raw materials required for manufacturing the final product, such as timber, core veneer, face veneer, phenol, and melamine. The appellant also sought cross-examination of witnesses whose statements were relied upon, citing procedural irregularities under Section 9D of the Central Excise Act, 1944.2. The Tribunal noted that the demand was based on the assumption of clandestine manufacture and clearance of goods. The appellant's challenge focused on two main grounds. Firstly, they questioned how they could manufacture the final product in the absence of other raw materials besides formaldehyde. The Tribunal observed that the Revenue failed to establish the source of other inputs and did not conduct stock-taking to verify the allegations. Relying on the decision in the case of Samrat Plywood Ltd., the Tribunal held that without evidence of procurement of all raw materials, the charge of clandestine manufacture and removal was not sustainable.3. Secondly, the appellant raised concerns about the lack of cross-examination granted. The Tribunal found that the case against the appellant was primarily based on third-party statements and documents like weighment slips. However, the Tribunal noted that the Revenue failed to establish the authenticity of the weighment slip where the appellant's name was handwritten. Additionally, the Tribunal emphasized that no cross-examination of witnesses was allowed, following the precedent set in the case of Kuber Tobacco India Ltd. The Tribunal concluded that the Revenue failed to prove the charge of clandestine manufacture by the appellant, leading to the setting aside of the impugned order.4. In conclusion, the Tribunal ruled in favor of the appellant, setting aside the impugned order due to the Revenue's failure to substantiate the allegations of clandestine manufacture and clearance of goods. The appeal was allowed with consequential relief, if any, granted to the appellant.
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