2013 (9) TMI 414 - CESTAT NEW DELHI

Clandestine Removal of Goods – Failure to Bring Evidences - The challenge to the orders essentially related to absence of cogent evidence in support of the charge against the appellants relating to clandestine removal of the goods, failure on the part of the Department to adduce satisfactory evidence in support of such charge and the findings having been arrived at by the authority in the absence of evidence in support - Held that:- The Revenue failed to substantiate the findings recorded in the impugned Order regarding production capacity, to persuade to reject the contention of the appellant that there was failure on the part of respondent to collect any evidence in relation to either procurement of raw materials by the appellant or production of huge quantity of final goods alleged as removed clandestinely to sustain the charge of clandestine removal - Once unaccounted production was not established, even otherwise there can be no clandestine removal thereof - Unaccounted removals have in any case not been established on the basis of the evidence available on record.

What is the relevancy of the documents seized in the course of the panchnama in the case in hand. In that regard, it would be necessary to ascertain as to what were the documents those were seized by the investigation machinery, what is the relevancy of those documents to bring home the charge against the appellants and to what extent - can it be said that any credibility can be given to the so-called documentary evidence sought to be relied upon to support the charge of clandestine removal of the goods by the appellants - Neither the panchnama satisfies the minimum requirement of rules of procedure nor any credibility can be given to the materials allegedly seized in the course of such panchnama nor to the documents sought to be relied upon in the matter. The appellants were justified in making grievance of prejudice having been suffered by them on account of uncorroborative documentary evidence relied upon by the department.

Ganga Rubber Industries vs. CCE [1986 (6) TMI 214 - CEGAT, NEW DELHI] - it was for the Department to establish that the entries in books recovered in the course of investigation were genuine and the fact that such verification was done had to be established by the Department - In the absence of proof about entries in the books to be representing actual clandestine removal, it cannot be said that the Revenue has discharged its burden.

Sai Chemicals Pvt. Ltd. Vs. CCE[2010 (4) TMI 446 - CESTAT, NEW DELHI] - the demand cannot be sustained without any tangible evidence, based only on inferences involving unwarranted assumptions - In the entire records of proceedings, there was no evidence to indicate that there was clandestine manufacturing - There was no independent tangible evidence on record of any clandestine purchases or receipt of the raw materials required for the manufacturing of the alleged quantity of finished goods for its clandestine removal from the factory - In the entire notice and the order there was no satisfactory and reliable independent evidence as regarded the unaccounted manufacture and or receipt of the huge quantities of raw materials - The quantities of the bags dispatched from the factory would require some transportation arrangement for delivery from the factory - any reliable evidence about any vehicle coming to or going out of the factory without proper entries was not forthcoming - There was also no cogent evidence about any freight payment for any such movement.

Tangible evidence of removal from factory of unaccounted goods so manufactured, by loading from factory and transportation therefrom, of alleged clandestinely removed goods – there was no reliable evidence of the actual customer/recipient of the clandestinely removed goods with their confirmation of unauthorized payment towards unaccounted purchase of goods allegedly manufactured and removed in a clandestine manner from the factory of the appellant - There was no recovery of any unaccounted sales proceeds in substantial cash in the factory or office premises or anywhere else in the control of the appellant-company, backed by any confirmation oral or written from the person giving such cash against goods removed in clandestine manner without payment of duty from the factory of appellant-company - Decided in favour of Assessee.