2000 (2) TMI 111 - HC - Central Excise

Court Upholds Tribunal Decision Dismissing Revenue Application

The court upheld the Tribunal's findings, dismissing the revenue's application as no interference under Sec. 35G was warranted. The Tribunal's conclusions ... Appeal - Non-joinder of party Issues Involved:1. Violation of principles of natural justice.2. Non-joinder of M/s. ACTCL as a respondent.3. Alleged clandestine removal of goods from the factory premises.Issue-wise Detailed Analysis:1. Violation of Principles of Natural Justice:The revenue contended that the adjudicating authority's order, confirmed by the Tribunal, violated the principles of natural justice as the Collector did not allow the deputation of some officers to defend their case nor provided reasonable opportunity to them. This contention was rejected as baseless and frivolous. The Tribunal noted that the revenue had conducted thorough investigations and found no credible evidence against the respondent. The respondents produced all necessary registers, records, and affidavits, and there was no examination of witnesses or seizure of goods to substantiate clandestine removal. The Tribunal emphasized that the revenue's case was based on duplicate challans from the transporter, which alone could not prove clandestine removal without supporting evidence such as raw materials consumed, goods manufactured, and electricity bills. The Tribunal referenced previous judgments, including *Kashmir Vanaspati (P) Ltd. v. CCE* and *Sayaji Iron & Engg. Co. Ltd. v. CCE*, to highlight that irregularities in record maintenance alone do not constitute evidence of clandestine removal.2. Non-joinder of M/s. ACTCL as Respondent:The Tribunal observed that the appeal against the respondent was not maintainable due to the non-joinder of M/s. ACTCL, whose evidence was used to allege clandestine production and removal of goods. The Tribunal noted that the evidence from M/s. ACTCL was crucial, and without making them a party, the appeal could not be sustained. The Tribunal emphasized that for fixing the liability of duty based on documents recovered from a third party, it is sufficient to call such a person as a witness to prove the authenticity of the documents. Penal actions under Rule 209(A) of the Central Excise Rules require making the party aware of the documents used against them, but it is not necessary to make the person from whom the documents were recovered a party to the proceedings. The Tribunal's conclusion that the appeal was not maintainable due to the non-joinder of M/s. ACTCL was challenged by the revenue, but the court deemed this issue academic in light of the findings on other points.3. Alleged Clandestine Removal of Goods:The revenue alleged that the respondent removed goods clandestinely without paying Central Excise duty. The Tribunal, after examining various documents, statements, and affidavits, found the evidence against the respondent uncredible and required to be rejected. The Tribunal noted that there was no excess production recorded in statutory registers, and the procurement of raw materials and electricity consumption tallied with the registers. The revenue failed to produce any evidence of seizure of goods, witness statements, or any discrepancy in raw materials or finished goods. The Tribunal referenced several judgments, including *Ambalal v. Union of India* and *B. Lakshmichand v. UOI*, to support its conclusion that the burden of proving clandestine removal lies heavily on the revenue. The Tribunal found that the revenue's case was built on duplicate challans maintained by the transporter, which were verified and found to tally with gate passes. The Tribunal concluded that there was no evidence of clandestine removal, and the revenue's appeal was based on assumptions and lacked substantive evidence.Conclusion:The court upheld the Tribunal's findings, emphasizing that the Tribunal's conclusions were based on a thorough examination of evidence and were not perverse. The court reiterated that findings of fact by the Tribunal are binding unless challenged on the grounds of perversity. The court dismissed the revenue's application, concluding that no case was made out for interference under Sec. 35G. The Tribunal's findings on the lack of evidence for clandestine removal and the non-violation of principles of natural justice were upheld, and the appeal was dismissed.