2004 (2) TMI 181 - AT - Central Excise

Appeal allowed due to lack of evidence in central excise duty case

The appeal filed by M/s. Dekon India against the confirmation of central excise duty and personal penalty for alleged clandestine removal of products was ... Demand - Clandestine removal Issues:- Appeal against order confirming central excise duty and imposing personal penalty for alleged clandestine removal of final products.- Contention regarding entries in private records seized during search.- Burden of proof on Revenue to show clandestine clearance.- Comparison with legal precedents regarding evidentiary value of private records.Analysis:1. The appeal was filed by M/s. Dekon India against the order confirming central excise duty and imposing a personal penalty based on the findings of clandestine removal of their iron, steel products, railway boggies, and wagon components. The Commissioner had confirmed the duty amount and penalty based on entries in private records seized during a search at the appellants' premises. The appellants argued that the entries were part of their manufacturing and clearance plan, tailored for railways, and denied any clandestine removal.2. During the hearing, the appellants' consultant argued that the burden of proof to show clandestine clearance lies with the Revenue, not the appellants. Referring to legal precedents, including CCE v. Ravi Shankar Industries Ltd. and CCE v. M/s. Dhanvilas Snuff Co., it was highlighted that mere entries in private notebooks are not sufficient evidence of clandestine removal without corroborative evidence. The appellants' final products were exclusively for government enterprises like Railways, and apart from the diary entries explained as a plan diary, there was no other evidence of clandestine manufacture or removal.3. The Tribunal found that there was no substantial evidence, such as purchase records or statements from customers, to support the charge of clandestine removal against the appellants. Relying on the legal precedent set in K. Rajagopal v. CCE, the Tribunal concluded that private notebooks alone are not conclusive evidence of clandestine removal without additional corroborative evidence. As a result, the appeal was allowed, providing consequential relief to the appellants.This detailed analysis of the judgment highlights the key issues raised, the arguments presented, and the legal precedents considered, leading to the Tribunal's decision to allow the appeal based on the lack of sufficient evidence supporting the charge of clandestine removal.