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2022 (8) TMI 1198 - AT - Central ExciseClandestine Removal - MS ingots - reliance placed on third party evidences - reliability of statements - demand based on document recovered from the premises of Shree Ram Transporting Co - HELD THAT:- The present case has been originated pursuant to the search being conducted not in the premises of M/s. H R Steel Pvt Ltd. but in the premises of M/s GI&SW and in the premises of transporter of said M/s. GI&SW i.e,. Shree Ram Transporting Co. It is further observed that the sole basis for confirmation of demand herein is the document recovered from the premises of Shree Ram Transporting Co. i.e. ‘Mangla register’ and the statements of Shri Vikram Bisht, of GI&SW, Shri Rohtas Bidhuri and Shri Suparas Banthia - In absence of any documents to corroborate the entries of ‘Mangla register’, the said document is held to be nothing but an evidence of third party having no bearing on the present appellant. Such a document cannot be used to adversely affect the appellant. The onus was on the department to procure such documentary evidence from the appellants premises which would have corroborated the said ‘Mangla register’ but apparently and admittedly nothing was recovered from the appellants premises. In the present case, there are no other evidence or document in the form of some verification of the raw material of appellant or the material received in the appellants premises from M/s. GI&SW. No transportation material in the appellant premises was recovered. None of the documents as mentioned, got recovered from appellant’s premises. It stands clear that ‘Mangla register’ relied upon by the Adjudicating Authority below is nothing but a third party evidence. It has been settled in catena of decisions that third party evidence cannot be used for duty demand and for imposition of penalty. The duty demand has wrongly been confirmed against M/s. H R Steels Pvt. Ltd. Once there is no evidence of any clandestine removal or duty evasion, as alleged, by M/s. H R Steels Pvt Ltd., no question arises for imposition of penalty on its Director or the Manager. Resultantly, the order imposing penalty on Shri Suresh Chand Sharma, Manager and Shri Harish Dang, Director is also held to be not sustainable. Penalty imposed upon the partners of M/s. GI&SW - Rule 26 of CER, 2002 - HELD THAT:- Apparently M/s. GI&SW is not a co-noticcee in the present case despite that the search was conducted in their premises. The penalty imposed upon both of its Directors have been confirmed under Rule 26 of CE Rules, 2002 - A bare reading of Rule 26 makes it clear that penalty under that Rule is applicable only in the case where the person is dealing with the goods which are liable for confiscation - In the present case, apparently and admittedly, no goods were confiscated, question of invoking Rule 26 does not at all arises. Otherwise also there is no evidence on record to show that these partners were in any way concern with these goods - the imposition of penalty upon both the partners is also not sustainable. Appeal allowed - decided in favor of appellant.
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