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2019 (1) TMI 172 - AT - Central ExciseClandestine removal - demand based on assumptions and presumptions - alleged parallel invoices - the proposed confiscation of the stock and the penalties confirmed on the Director of the appellant Company on the ground of unaccounted production and clearances being evidenced by the categorical admission of the Director and Supervisor of the appellant Company - Held that:- Bare reading of provisions of Rule 25 and 26 of CER, 2002, makes it clear that the confiscation and penalty can be imposed subject to the provisions to Section 11AC of Central Excise Act, 1944 i.e. first of all it need to be seen as to whether the act of the appellant are that of fraud, collusion, wilful misstatement suppression of fact or any contravention of the provisions of law and that too with an intention to evade duty - Thus, it becomes clear that the Commissioner (Appeals) has committed an error while holding that mensrea is not required to Order confiscation under Rule 25. Whether the documents recovered vide Panchnama dated 01.06.2016 and the statements of the Company’s Director allegedly being an admission are sufficient for proving the alleged clandestine removal? - Held that:- Though mere irregularity and even illegality in case of search and seizure cannot by itself render the documents seized in the case of such search or seizure to be inadmissible in evidence but the fact of the present case is that the Panchnama merely records that the officers on search found certain records which does not give the description of so called record except saying that the same are described in the annexure to SCN. All this information was absolutely necessary to give credibility to the Panchnama particularly when the entire proceedings in that record are sought to be challenged and disputed and also particularly when the permission to cross examine the witnesses of Panchnama was sought however was not granted for. Further basis of confirming the confiscation has been the evidence as that of eye estimation for determination of stock but it has been a settled principle that the allegations of clandestine removal of eye estimation is not correct. The alleged admission of the Director of appellant - Held that:- The allegations of clandestine removal are serious in nature and the clandestine activities are quasi criminal hence the revenue alleging the same is required to prove it by sufficient corroborative evidences - there is nothing on record to show that the officers of revenue had done anything for the weightment of the stock as arrived by them. They have not even produced any inventory to show that the stock was physically verified by them. Nor it is the case of the Revenue that the alleged excess stock was not entered in the RG Register deliberately and with malafide intent to remove goods clandestinely. The findings of adjudicating authority for the confiscation of the impugned stock and the imposition of the penalty upon Mr. Bharat Shukla are the findings without any basis and without any cogent and corroborative evidence - appeal allowed - decided in favor of appellant.
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