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2019 (1) TMI 706 - MADRAS HIGH COURTClandestine removal - cotton yarn - Department was of the view that the assessee removed cotton yarn on cheese in the guise of hank yarn with an intent to evade the payment of excise duty and clandestinely cleared the same - Demand based upon confession statement, which were retracted - Jurisdiction - Held that:- The assessee appears to have lost sight of the fact that any exemption from levy of duty is not automatic. Exemptions come along with conditions. Exemptions are either product specific or purpose specific or on other parameters. Exemptions can be conditional or absolute, yet it is an exemption. Therefore, strict interpretation is to be given and a person, who is charged of clandestine removal with sufficient evidence has to establish his innocence, having failed to discharge the burden cast on them and cannot be heard to say that despite all the charges against them, they are still entitled for exemption - perversity is manifast in the order passed by the Tribunal. The materials such as gate passes etc., which were recovered during the search and analysed by the Adjudicating Authority have been totally brushed aside. No proof of prejudice had been shown by the assessee for not making available for cross examination of two of the persons, who were the buyers from the assessee, who had candidly stated about the clandestine transaction. There is also an allegation of destruction of records at the assessee's end after the products were delivered to the buyers. Thus, in our considered view, there was sufficient material to establish that the assessee was guilty of clandestine removal and consequently, is liable for payment of duty, penalty and interest. Thus, the Tribunal wholly erred in reversing the order passed by the Commissioner and as we are satisfied that the order passed by the Tribunal is perverse and we are inclined to interfere with the order. The Adjudicating Authority is right in his conclusion that there are good and sufficient reasons as to why the assessee had effected clandestine clearances under the guise of clearing hank yarn. It attracts NIL rate of duty. Majority of the buyers of yarn from the assessee have given statements under Section 14 of the Act stating that they are manufacturing terry towels from the goods purchased from the assessee in their power looms, which goes to show that they cannot use hank yarn and this evidence was also brushed aside by the Tribunal. Appeal allowed - decided in favor of Revenue.
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