2003 (12) TMI 182 - AT - Central Excise

Successful Appeal Over Alleged Duty Evasion Due to Lack of Concrete Evidence

The manufacturing company and its director successfully appealed against the lower authorities' orders confirming a demand of Rs. 4,34,134/- due to ... Demand and penalty - Clandestine Removal - Evidence Issues: Alleged clandestine removal of goods leading to demand confirmation and penalties.In the instant case, the manufacturing company and its director appealed against the lower authorities' orders confirming a demand of Rs. 4,34,134/- against them. The allegations revolved around a shortfall in production compared to normative consumption of raw materials, leading to suspicions of clandestine removal. The lower authorities confirmed the demand, imposed penalties, and the appellants challenged these findings.Upon hearing both sides, it was observed that the actual production figures were marginally lower than the projected production, with a yield of 1.5 kgs. of sodium bisulphite (SBS) per kg. consumption of soda ash instead of the expected 1.6 kgs. The judge noted that without additional corroborative evidence, the allegation of duty evasion based on this marginal variation lacked a basis and was unsustainable.The judge emphasized that while a shortfall in recorded production compared to theoretical yield could raise suspicions of evasion, mere suspicion could not replace concrete evidence. In the absence of credible evidence supporting the claim of clandestine removal, the judge held that the orders of the lower authorities were not sustainable and needed to be set aside.Conclusively, the appeals were successful, and the orders of the lower authorities confirming the demand and penalties were set aside. The judgment highlighted the importance of concrete evidence in cases of alleged clandestine removal to substantiate claims and sustain orders.