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2020 (11) TMI 549 - CESTAT KOLKATAClandestine Removal - 13683.05 MT of MS Billets - cogent, positive and concrete evidence to prove the said allegation, present or not - unaccounted purchase of various raw materials - reliability of third party documents - HELD THAT:- It is found from the show cause notice, that the allegation itself was that ‘in the specific question set out before him as to how he would disprove the facts of such clandestine clearance of their finished goods side by side their authorised clearance, whereas both of which have candidly confessed by M/s SPRML. Shri Mahapatra miserably failed to disprove the same whereby it led to the natural conclusion of conscious and organized modus operandi to evade legitimate Govt revenue in the guise of transaction that they have pretended to project themselves in clearing only authorised clearance of goods with M/s SPRML. It can be made out that the Notice means to say that Shri Mahapatra could not disprove the allegation; it was accepted by Shri Debasis Samal and Shri Anil Jain of M/s SPRML and that in spite of the same Shri Mohapatra maintained that they have not cleared any goods other than those shown in authorised clearances. We find that the above is only an allegation and the department has not adduced any evidence whatsoever to establish the case of clandestine removal against the appellants. It was incumbent upon the department, who are alleging, to prove the same with evidence. The reliability of such an evidence becomes weak as the same comes from a third party. It has been alleged that the appellants have clandestinely removed 13,683.05 MT of MS Billets without payment of duty. The allegation is only based on the data set to have been recovered from the secret office of M/s SPRML and no other evidence has been put forth. We find that as averred by the learned Counsel for the appellants, reliance cannot be placed only on the evidence available with the Third Party. The appellants have alleged that while obtaining the electronic record at M/s SPRML, department did not adhere to the provisions of 36(B) of the Central Excise Act, 1944 and a certificate as required under Section 36B(4) is not issued. It is found that neither the SCN nor the adjudication order have dealt with the facts relating to this issue and from the records of the case, it cannot be made out whether the same were followed. The learned commissioner did not controvert the allegations in the adjudication order. Therefore, the reliance on the records thus seized from M/s SPRML alone, do not help the case of department, unless the same are corroborated by other evidence. We agree to the proposition of the learned Commissioner that the department is not required to prove clandestine removal by mathematical precision. However, the instant case, we find that not even single evidence has been brought on record to show clandestine removal, conclusively establishing at least in a sample transaction. We find that the Annexure-H contains alleged receipts by M/s SPRML date wise from the appellants - Having conducted no investigation whatsoever, department cannot confirm the demand only on the basis of documents seized from some other person, more so the contents of which were never accepted by the appellants and cross examination was not allowed. If allegations can be made just on evidence obtained from third parties, there would be no dearth of such cases. We find that leaving alone proof with a mathematical precision, in the instant case, evidence made available is not even enough even for a Gross approximation. The appellant has relied upon a number of cases wherein it was settled that in order to prove the allegations of clandestine removal the department must bring on record cogent, positive and concrete evidence to prove the said allegation, the said allegation cannot be sustained on the basis of assumptions and conjectures. Though, there is no bar in issuing SCNs for the same period covering different aspects backed by different set of evidence, it is not understood as to why the Department chose to issue different SCNs to the appellant on the allegation of clandestine removal when the genesis of both the cases was in the investigation conducted by DGCEI against M/s SPRML. However, as we found that the present SCN is not sustainable on merits, we are not going into the above issue. The appellants have also raised an issue that while the appellants have been issued a SCN alleging clandestine removal to M/s SPRML on the basis of documents alleged to have been recovered from M/s SPRML, M/s SPRML have not been made party to the impugned SCN and thereby, the case suffers from the principle of non-joinder. Appeal allowed.
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