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of <h1>Court Overturns Duty Demand for Polyethylene Film Makers Due to Insufficient Evidence of Clandestine Activities.</h1> <h3>ESSVEE POLYMERS (P) LTD. Versus COMMISSIONER OF C. EX., CHENNAI</h3> ESSVEE POLYMERS (P) LTD. Versus COMMISSIONER OF C. EX., CHENNAI - 2004 (165) E.L.T. 291 (Tri. - Chennai) Issues involved: Duty demand and penalty under Section 11AC confirmed based on slips and documents recovered during raid at Managing Director's premises.Summary:The Commissioner confirmed duty demand and imposed penalty under Section 11AC based on slips and documents recovered during a raid at the Managing Director's premises. The appellants, manufacturers of polyethylene films, contested the decision citing lack of evidence such as proof of purchase of raw materials, manufacture of final goods, and flow back of funds. The appellants argued that the slips alone cannot be the basis for confirming duty. They referenced various judgments to support their contention that the penalty is not imposable and that the evidence presented was insufficient. The Department defended the order, stating that the amount deposited in the PLA by the appellants was sufficient proof of the case. The Tribunal, after considering the submissions, concluded that mere slips and statements are not enough to confirm duty demand and clandestine removal. Lack of evidence regarding raw materials, manufacturing process, electricity usage, and flow back of funds led to the acceptance of the appellant's plea. The Tribunal found no reliable evidence of clandestine manufacture and removal of goods, setting aside the impugned order and allowing the appeal.This judgment highlights the importance of substantial evidence in confirming duty demand and penalty under Section 11AC, emphasizing the need for proof of various elements such as raw material purchase, manufacturing process, and flow of funds to establish clandestine activities. The Tribunal's decision underscores the significance of thorough investigation and concrete evidence in such cases to ensure fair and just outcomes.
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