Duty affirmed for 81 short moped tyres; rest of demand quashed for reliance on uncorroborated private diary

CEGAT, New Delhi affirmed the duty demand only for the 81 moped tyres found short on physical verification, holding that shortage was not disputed and demand for that quantity is sustainable. The tribunal set aside the remainder of the impugned order because the department relied solely on a private diary without corroborative evidence of clandestine production or removal; expert report doubts were not overcome and mere suspicion cannot substitute proof. Appeal partly allowed.

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Issues Involved:
1. Demand of duty on 81 tyres found short.
2. Alleged clandestine removal of tyres and tubes.

Summary:

1. Demand of duty on 81 tyres found short:

The appellants did not seriously dispute the demand of duty of Rs. 1,275.75 on 81 tyres of Moped found short during physical verification. The Tribunal confirmed this demand, stating, "We confirm the demand of duty of Rs. 1,275.75."

2. Alleged clandestine removal of tyres and tubes:

The Department's case was based mainly on a private diary allegedly detailing unaccounted production. The appellants contested this, arguing that the diary was not connected to their production records and that the confessional statement of Shri Surinder Singh was retracted. They also cited discrepancies in production figures and lack of evidence regarding raw material discrepancies or factory capacity to support the alleged clandestine removal.

The Tribunal noted that the learned Collector relied solely on the diary and the confessional statement without considering the retraction or discrepancies. It emphasized that "no importance can be attached to that part of the confessional statement which incriminates him as it was immediately retracted." The Tribunal also highlighted the lack of corroborative evidence such as raw material utilization, labor employed, and power consumed.

The Tribunal referred to several precedents, including *Sarwan Singh v. State of Punjab* and *Kashmir Vanaspati (P) Ltd. v. Collector of Central Excise*, which underscored the necessity of solid evidence to prove clandestine removal. It concluded that the diary alone could not substantiate the Department's claims, stating, "At the most, it may raise a doubt but that cannot take a place of proof."

Conclusion:

The Tribunal upheld the demand of Rs. 1,275.75 on 81 tyres found short but set aside the remaining part of the impugned order related to the alleged clandestine removal. The appeal was thus partly allowed.

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