2021 (4) TMI 718 - AT - Central Excise

Tribunal overturns duty demand due to lack of evidence, stresses need for proper documentation.

The Tribunal set aside the duty demand confirmation against the present appellant, emphasizing the insufficiency of evidence and reliance on third-party ... Clandestine removal - evasion of huge amount of excise duty - reliance placed on the third party evidence - evidentiary value of the third party evidence - HELD THAT:- Reliance placed in the case of BAJRANGBALI INGOTS & STEEL PVT. LTD., SURESH AGARWAL VERSUS CCE, RAIPUR [2019 (1) TMI 966 - CESTAT NEW DELHI] where it was held that findings of clandestine removal cannot be upheld based upon the third party documents, unless there is clinching evidence of clandestine manufacture and removal of the goods. The order under challenge is not sustainable - Appeal allowed - decided in favor of appellant. Issues:1. Allegations of unaccounted procurement of raw materials, suppression of production, and clandestine removal of excisable goods.2. Duty demand confirmation against multiple noticees, including the present appellant.3. Reliance on evidence and documents recovered during search operations.4. Challenge to the order based on lack of concrete evidence and reliance on third-party evidence.Analysis:Issue 1:The case involved allegations of unaccounted procurement of raw materials, suppression of production, and clandestine removal of excisable goods by M/s. Hari Om Ingots and Power Limited and other noticees. The search operations conducted on the premises yielded incriminating documents leading to duty demand proposals against the noticees, including the present appellant.Issue 2:The duty demand was confirmed against the present appellant based on the impugned show cause notice, which proposed a specific amount of duty, interest, and penalties to be recovered. The appellant challenged the demand, stating that the evidence against them was insufficient and based on loose handwritten documents without corroborative evidence.Issue 3:The appellant argued that the evidence presented by the department, including handwritten documents recovered during the search, was not sufficient to prove their involvement in clandestine activities. The appellant highlighted discrepancies in the handling of electronic data and the lack of proper certification as required under the law. The Tribunal also noted the absence of tangible, direct, and incontrovertible evidence to support the charges of clandestine removal.Issue 4:The Tribunal reviewed the evidentiary value of third-party evidence and cited relevant case law to establish that findings of clandestine removal cannot be upheld solely based on third-party documents without concrete evidence of such activities. The Tribunal set aside the order, concluding that it was not sustainable due to the lack of substantial evidence and reliance on third-party records.In conclusion, the Tribunal found that the order confirming the duty demand against the present appellant was not sustainable due to the lack of concrete evidence and reliance on third-party records. The judgment highlighted the importance of tangible evidence to prove charges of clandestine removal and emphasized the need for proper certification and handling of electronic data in such cases. The appeal was allowed, and the order under challenge was set aside.