Appeal Succeeds: Tribunal Rejects Clandestine Manufacturing Allegations Due to Procedural Violations Under Sections 9D(2) and 36B

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....In this CESTAT decision, the Tribunal allowed the appeal against allegations of clandestine manufacture and removal of MS ingots. The Tribunal found multiple procedural violations by the adjudicating authority, including failure to comply with Section 9D(2) of the Central Excise Act when relying on statements recorded under Section 14, and non-compliance with Section 36B regarding electronic evidence admissibility. The Tribunal emphasized that in cases involving serious financial penalties, Revenue must meet a "clear and convincing evidence" standard, which was not satisfied. The investigation lacked corroborative evidence such as unaccounted raw material procurement, production capacity evaluation, or statements from transporters. Consequently, the demands for duty on alleged clandestine clearances, recovery of CENVAT credit, and associated penalties were found unsustainable.....