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of <h1>Tribunal Overturns Confiscation Order for Unaccounted Stock & Evasion of Central Excise Duty</h1> The Tribunal set aside the order for confiscation and penalty in the case involving allegations of unaccounted stock and evasion of central excise duty by ... Clandestine removal - MS Ingots - Iron Ore - stock of finished goods lying in factory without entry in production register - corroborative evidence proving the allegations against the appellant or not - penalty - HELD THAT:- There was no better evidence before Commissioner (Appeals) than it was before Assistant Commissioner. Commissioner (Appeals) has held that the verification of stock of Ingots was conducted in presence of the Authorized Signatory of the appellant, who neither had objected the method of physical verification nor made any complaint. He had rather admitted the same and also in the excess stock of 56.300 MT of MS Ingots valued at ₹ 11,09,110/-. The statement of said Authorized Signatory Shri Kumar Chakraborty is perused. It shows that there is no admission for the alleged excess stock. None as his answers recorded in the statement amount to admission except that “no satisfactory reason has been cited” is alleged against said Shri Chakraborty. No doubt there is no retraction as in impressed upon by the Department, but once there is no admission retraction is not required. It is otherwise apparent from record that the appellant requested for the opportunity of cross-examining the witnesses the said opportunity has been denied cross examination is the basic rule of ensuring fair trial the denial thereof in the case which lacks any cogent evidence adversely affects the Department. Department has not bring for any such evidence which may prove their allegations. In absence thereof, however, in view of the acknowledge that the notice shortage is just of one day production even if recording as required under Rule 10 is missing, but the same does not warrant the application of Rule 25 (1) (b) of Central Excise Rules, 2002. Thus, neither the MS Ingots as well as the Iron Ore are liable for confiscation nor present is the case of imposition of penalty - appeal allowed - decided in favor of appellant. Issues:Allegations of unaccounted stock and evasion of central excise duty, confiscation of seized goods, imposition of penalty, interpretation of Rule 25 of Central Excise Rules, 2002.Analysis:The judgment involves the case of M/s Sky Alloys & Power Pvt. Ltd. where their premises were searched due to suspicions of evasion of central excise duty. The appellant was accused of not accounting for raw materials and excisable goods in their daily stock, along with removing them without paying the duty. The show cause notice proposed the confiscation of seized goods and imposition of penalty. The initial order confirmed the proposal, leading to the appeal before the Tribunal.The appellant argued that the shortage was due to a single-day production procedure not yet entered in records, with no evidence of deliberate evasion. The Department contended that the lack of maintaining daily stock accounts contravened Rule 10, justifying confiscation and penalty under Rule 25. The Tribunal noted the burden on the Department to prove deliberate evasion and the need for cogent evidence.The Tribunal observed that the authorities relied on presumptions without substantial evidence. Citing case law, it clarified that non-accounting in records does not necessarily indicate intent to evade duty. The Tribunal emphasized the importance of corroborative evidence for allegations of clandestine removal.The Adjudicating Authority acknowledged the excess stock was for a single day's production, with no evidence of previous clandestine removal. The Tribunal highlighted the lack of direct evidence and the importance of fair trial procedures like cross-examination. It concluded that the seized goods were not liable for confiscation or penalty, setting aside the order and allowing the appeal.In summary, the judgment analyzed the allegations of unaccounted stock and duty evasion, the application of Rule 25, the burden of proof on the Department, and the importance of corroborative evidence and fair trial procedures in such cases. The Tribunal emphasized the need for substantial evidence to support allegations of clandestine removal and upheld the appeal based on the lack of conclusive proof against the appellant.
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