2016 (2) TMI 763 - CESTAT NEW DELHI

Imposition of penalties - sustainability of demand of duty on the finished products based on the evidence put-forth by the Revenue in the proceedings before the lower authorities - Held that:- In the present case, the corroboration said to have been made is the admission statement of the appellant/assesses. Revenue stopped investigation on recording statement. No further verification or evidence was sought to be recovered for the clandestine manufacture, first of M.S. Ingots and thereafter, from M.S. Ingots to M.S. Angles, etc. and thereafter, their unaccounted clearance to various buyers. No verification was made in the appellant’s manufacturing unit or in their records. The admission made by the Director or Partners of the appellant /assesses gives a strong indication of the clandestine activity of the appellant /assessee. However, that by itself cannot be a conclusive evidence especially, as the product on which duty is demanded is M.S. Angles and Channels, etc., which are made from M.S. Ingots, which are in turn made from purported clandestinely received sponge iron. The statements did not provide details of receipts with dates, manufacture or sale to identifiable buyers etc. It is essential to have some piece of corroboration for such a clandestine activity other than the sole evidence of general admission statement of the Director or /partner. The contents of the statement itself was contested and denied later.

Thus we find the confirmation of demand and imposition of penalties in these appeals are not sustainable. - Decided in favour of assessee