1990 (5) TMI 159 - AT - Central Excise

Appellate tribunal overturns decision due to lack of evidence in clandestine consignment case.

NAVBHARAT BANASPATI & ALLIED INDUSTRIES Versus COLLECTOR OF C. EX.

The appellate tribunal allowed the appeal in a case involving allegations of clandestine removal of consignments without valid documents. The tribunal ... Adjudication - Confiscation Issues:Alleged clandestine removal of consignments without valid documents, violation of Rule 52(A) of C.E. Rules, 1944, confiscation of goods and truck, imposition of personal penalty.Analysis:The appellant, engaged in manufacturing vegetable products and refined oil, faced allegations of clandestine removal of consignments without valid documents, specifically gate passes. The first allegation involved diverting a consignment to a different location without proper documentation, contravening Rule 52(A) of C.E. Rules, 1944. The second allegation pertained to discrepancies in the timing of gate pass issuance and octroi payment, leading to suspicions of clandestine removal. The adjudicating authority ordered duty payment for the removed goods, confiscation of some goods and a truck, and imposed a substantial personal penalty on the appellant.The appellant challenged the decision, arguing that the diverted consignment was originally cleared under a valid gate pass for their own factory, making it not clandestine. Regarding the second allegation, the appellant explained the timing discrepancies as a common practice to expedite transport, asserting no illegality under Central Excise Act or Rules. The Department and lower authorities upheld the allegations based on the timing inconsistencies and lack of proper documentation.Upon review, the appellate tribunal found insufficient investigation into the fate of the consignment originally destined for Hoshiarpur and raised doubts about clandestine manufacture. The tribunal highlighted the necessity for the Department to verify the whereabouts of the consignment initially cleared under a gate pass. The tribunal questioned the validity of the allegations under Rule 52(A) and emphasized the lack of concrete evidence supporting clandestine removal.Additionally, the tribunal criticized the assumption that the appellant used the same truck for two separate locations simultaneously, highlighting the need for further inquiry with the State Transport Authority. The tribunal deemed the findings to be based on conjecture rather than substantial evidence, leading to the decision to allow the appeal. Consequently, the tribunal set aside the impugned order and provided consequential relief to the appellant, emphasizing the importance of evidence-based decisions in such cases.