Clandestine removal proved by corroborated statements and documents; penalty on the partnership firm under Rule 209A was deleted.

Voluntary statements corroborated by seized slips, gate passes and surrounding circumstances supported a finding of clandestine removal for the second consignment of M.S. ingots, so duty, confiscation and penalty were sustained for that part. On the alleged third consignment, the available material did not reliably link the goods to the stated manufacturer, so benefit of doubt was extended and that demand was rejected. The truck redemption fine was reduced as excessive. Under Rule 209A of the Central Excise Rules, 1944, penalty could attach to the person concerned with the offending goods, not to the partnership firm as such, so the penalty on the firm was set aside.

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Issues: (i) whether the second consignment of M.S. ingots was clandestinely removed from the factory by misuse of the same gate pass and whether duty, confiscation and penalties were sustainable; (ii) whether penalty could be imposed on the partnership firm M/s. Pioneer Steel Re-rolling Mills under Rule 209A of the Central Excise Rules, 1944.

Issue (i): Whether the second consignment of M.S. ingots was clandestinely removed from the factory by misuse of the same gate pass and whether duty, confiscation and penalties were sustainable.

Analysis: The driver's statement, the statement of the factory manager, and the seized slips and gate pass established that 135 ingots were cleared in the morning and the same gate pass was used again for transport of another 135 ingots. The Tribunal accepted the department's case for the second consignment and held that the truck was used for clandestine removal. On the third consignment, however, the only material was the gate slip and there was no reliable link showing that it emanated from M/s. Aditya Steel Industries. Benefit of doubt was therefore extended on that part. The redemption fine on the truck was found excessive and reduced.

Conclusion: Duty, confiscation and penalty were sustained for the second consignment, the demand for the alleged third consignment was rejected, and the truck redemption fine was reduced.

Issue (ii): Whether penalty could be imposed on the partnership firm M/s. Pioneer Steel Re-rolling Mills under Rule 209A of the Central Excise Rules, 1944.

Analysis: Rule 209A contemplated penalty on a person concerned with the offending goods and not on a partnership concern as such. The penal liability was therefore held to attach only to the individual concerned and not to the firm itself.

Conclusion: Penalty on M/s. Pioneer Steel Re-rolling Mills was set aside.

Final Conclusion: The connected appeals resulted in partial relief to the assessee side, with the duty and core findings of clandestine removal substantially upheld, the truck fine reduced, the individual penalties maintained, and the penalty on the partnership firm deleted.

Ratio Decidendi: For clandestine removal, a finding may rest on voluntary statements corroborated by contemporaneous documents and surrounding circumstances, but penalty cannot be imposed on a partnership firm under Rule 209A when the rule contemplates penalty only on the person concerned.

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