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of <h1>Tribunal overturns penalties, emphasizes need for clinching evidence in clandestine removal case.</h1> The Tribunal allowed the appeals, setting aside the demand and penalties imposed on the appellant. The Tribunal upheld the dropping of a major part of the ... Clandestine removal - MS ingots - consumption of electricity in excess during its manufacture - demand based on third party evidence - Held that:- Since the drop of demand qua excess electricity consumption has not been objected on the part of the Department, there is no appeal filed otherwise. And that the same has been dropped. Third party evidence - Held that:- The case of Revenue is based upon the statement of the representative of M/s. Monu Steels i.e. the third party evidence. The law i.e. as to whether the third party records can be adopted as an evidence for arriving at the findings of clandestine removal, in the absence of any corroborative evidence, is well established - There is a plethora of judgments to hold that to stand upon the charges as that of clandestine removal, there has to be some clinching evidence and the demand cannot be confirmed based on presumptions and assumptions - the present case is also the one where the Department has relied upon the 3rd party evidence. As already discussed above, the demand is not sustainable on the said basis. Penalty - Held that:- Appellant herein is merely a consignment agent that too for providing the raw material to the manufacturer i.e. M/s. Ispat India Ltd. The allegations of any clandestine removal of final products by M/s. Ispat India Ltd. are opined to have no bearing upon the appellant unless and until there is a corroborative cogent evidence to support the allegation of providing the raw-material without discharging the liability. The same is missing. Commissioner (Appeals) has committed an error while relying upon third party evidence to confirm the demand qua serious charge of clandestine removal - appeal allowed. Issues:1. Alleged excess electricity consumption during manufacture of MS Ingots2. Alleged clandestine removal of MS Ingots3. Legal validity of third party evidence in establishing clandestine removal4. Imposition of penalty on the appellantAnalysis:1. Excess Electricity Consumption:The Department alleged excess electricity consumption during the manufacture of MS Ingots, resulting in a demand of &8377; 5,32,49,247. However, the order under challenge dropped a major part of this demand, amounting to &8377; 5,12,27,885. The appellant contended that this issue has already been decided and the Department did not appeal the dropped demand. The Tribunal upheld the dropping of this demand as there was no objection from the Department, relying on a decision of the Hon'ble Supreme Court.2. Clandestine Removal:Regarding the alleged clandestine removal of MS Ingots, a demand of &8377; 20,21,362 was confirmed based on evidence from a third party, M/s. Monu Steels. The appellant argued that reliance on third party evidence without corroborative evidence is not legally sustainable. The Tribunal cited various judgments emphasizing the need for clinching evidence to establish clandestine removal. It held that the demand and penalty on the Director of the manufacturer were not sustainable based on presumptions and assumptions, setting aside the order to this extent.3. Legal Validity of Third Party Evidence:The Department emphasized the findings in para 3.6.13 of the order, which relied on the statement of the Director of the appellant regarding transactions with M/s. Monu Steels. However, the Tribunal found discrepancies in the statements and held that reliance on third party evidence alone is insufficient to prove clandestine removal. It referred to previous Tribunal decisions favoring appellants in similar cases involving third party evidence, setting aside the order based on such evidence.4. Imposition of Penalty:The Tribunal observed that the appellant was merely a consignment agent providing raw material to a manufacturer, M/s. Ispat India Ltd. It found no corroborative evidence supporting the allegations of clandestine removal of final products by M/s. Ispat India Ltd. As a result, the Tribunal set aside the remaining penalty of &8377; 50,000 imposed on the appellant, as there was no evidence to support the allegation.In conclusion, the Tribunal allowed the appeals, setting aside the demand and penalties imposed based on insufficient evidence and emphasizing the need for concrete proof in cases of alleged clandestine removal.
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