2018 (12) TMI 238 - AT - Central Excise

Tribunal dismisses duty demand based on loose papers but upholds part related to invoices.

M/s Paradise Enterprises & Shri Harmeet Singh Versus The Commissioner, Central Excise & Service Tax, Ghaziabad

M/s Paradise Enterprises & Shri Harmeet Singh Versus The Commissioner, Central Excise & Service Tax, Ghaziabad - TMI Issues:Allegations of clandestine activities and duty evasion based on recovered documents and statements.Analysis:The case involved allegations of clandestine activities and duty evasion against the appellants based on recovered documents and statements. The Revenue claimed that the appellants had clandestinely cleared a significant amount of finished goods without paying duty, supported by two charts prepared by officers. The show cause notice proposed a confirmed duty amount along with interest and penalties. The Commissioner confirmed the demand, interest, and penalties, leading to the present appeals.Upon hearing both sides and reviewing the impugned order, the Tribunal found the Revenue's case solely relied on rough entries in loose papers recovered from the factory. The appellants argued that these entries could not be the basis for proving clandestine removal without corroborative evidence. The statements of key individuals were not incriminating, and discrepancies were found in their testimonies. The Revenue failed to contact buyers or investigate further, despite having buyer names and vehicle details from the recovered documents.The Tribunal emphasized that the burden of proving clandestine activities rested on the Revenue, requiring positive and affirmative evidence. Legal precedents highlighted the need for concrete evidence in such cases, not mere conjectures. The Tribunal noted the quasi-criminal nature of such charges, necessitating strong evidence. In this case, the Revenue's case lacked independent corroboration and failed to establish clandestine removal conclusively.While dismissing the duty demand based on loose papers, the Tribunal upheld part of the demand related to nine parallel invoices recovered from the factory. The appellants admitted using these invoices for duty evasion, shifting the burden of proof to them. As they failed to demonstrate these invoices were part of statutory records, duty confirmation, interest, and penalties were imposed. However, the penalty on one appellant was set aside due to lack of specific involvement.Ultimately, the Tribunal set aside the demand based on loose papers but confirmed duty related to the recovered invoices. The penalty on one appellant was revoked, and the appeals were disposed of accordingly.