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2022 (5) TMI 646 - AT - Central ExciseViolation of principles of natural justice - Evasion of duty - clandestine removal - remand of the case - Tribunal has committed an error of law by remitting the matter back to the Commissioner for denovo inquiry on the issue concerning evasion of duty without discussion of evidence available on record which prevailed upon the Commissioner to drop this part of the demand - reliability upon the admission made by the AGM of the assessee company to sustain the order of imposition of duty - HELD THAT:- It is found from the allegations in the show cause notice that the said demand of Rs.9, 94, 65,997/- was proposed on the basis of the ‘bilty nakal register‘ (recovered from the two transporters) and on the basis of the statement of the two officers of the respondent – assessee namely Shri S. N. Jha, AGM (Excise) and R.K. Bhadoria, AGM (Logistics) - Hon‘ble High Court in its order have categorically held that the statement of the said two officers cannot be relied upon by Revenue for want of fulfilment of the requirements of Section 9D of the Act. The Hon‘ble High Court also took notice of the fact that the said Officers have retracted their statements soon thereafter and also not supported their statement given at the time of investigation, in their cross-examination. On a careful examination of the statements and cross-examination, it is found that there is no categorical admission of clandestine removal as alleged by the Revenue. It is also found that all these persons had retracted their statement within a period of few weeks/ months of the recording of their initial statement by the officers during investigation. Thus, these statements discussed hereinabove, do not support the allegations of clandestine removal for the alleged duty evasion of Rs.9,94,65,997/-. The charge of clandestine removal and duty evasion is a serious charge having civil consequences upon the assessee. Such charge cannot be confirmed unless there is sufficient corroborative evidence which leads to the inevitable conclusion of clandestine removal - In the facts of the present case, it is found that in absence of the relevant inputs necessary for production for the alleged quantity removed clandestinely, namely raw materials, electricity, labour etc., the condition precedent of manufacture is not established and in absence of such material evidence, only on the basis of third party evidence the charge of clandestine removal is not sustainable. Thus, the presumption as to the truth and evidentiary value of the documents is available to the Revenue, if the document relied upon is recovered and seized from the premises of the assessee. However, where any incriminating documents are recovered from the premises of third party, such third party should also be jointly prosecuted by being added as co-noticee in the show cause notice. The clandestine removal is a serious charge and needs to be established with cogent evidence. Learned Commissioners order as far as it relates to the dropping of demand of duty for Rs.9,94,65,997/-, needs no intervention - the appeal filed by Revenue is liable for dismissal - appeal dismissed - decided against Revenue.
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