Substantial question of law in excise appeal rejected where challenge only attacked factual findings on job-work and clandestine removal.

Under Section 35G of the Central Excise Act, the High Court examined whether the Revenue's challenge raised a substantial question of law or merely sought reappreciation of evidence on alleged clandestine removal and job-work transactions. The Tribunal had found that the goods were sent for job work with departmental intimation, challans were prepared, job-work charges were paid, TDS was deducted, and witness statements supported the job-work arrangement; it also found no positive evidence of clandestine removal, flow-back of consideration, or perversity in the evidence appreciation. The High Court treated the challenge as confined to factual findings and found no legal question warranting interference.

---

---

Issues: Whether the Revenue's appeal under Section 35G of the Central Excise Act, 1944 disclosed any substantial question of law, or whether it only sought reappreciation of factual findings recorded by the Tribunal on alleged clandestine removal and job-work transactions.

Analysis: The appeal lay only if the High Court was satisfied that the case involved a substantial question of law. The Tribunal had recorded factual findings that the goods were sent for job work under intimation to the Department, challans were prepared, job-work charges were paid, TDS was deducted, and the statements of the company's officers and most job workers supported the existence of job-work activity. It also found that no positive evidence established clandestine removal of yarn for sale without duty, and that the Revenue had not produced material to show flow-back of consideration or any perversity in the appreciation of evidence. The High Court held that the Revenue's challenge was directed only against these factual findings and did not raise any legal question warranting interference under Section 35G.

Conclusion: The appeal did not involve any substantial question of law and the Tribunal's factual findings were not shown to be perverse. The challenge failed and the assessee succeeded.

---