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2022 (9) TMI 737 - AT - Central ExciseClandestine removal of finished goods - suppression of production - duty paying invoices - third party evidences/corroborative evidences or not - Department observed that the appellant has cleared sponge iron, Billets and TMT Bars and coal without issuing invoices with the sole intention to not to pay the requisite Central Excise Duty on those clearances - HELD THAT:- There are no admission as has been observed by Commissioner (Appeals) in any of these statements, as far as the allegations in Show Cause Notice are concerned. None of these statements amounts to corroboration of DCS or of the recovered loose sheets. The findings of Commissioner (Appeals) confirming the demand holding the DCS/ loose sheets admissible into evidence in the light of the statements on record, are not sustainable. It thus becomes clear that for the support of those documents, Commissioner (Appeals) has laid utmost emphasis upon the statements recorded during the investigation but it is observed that the procedure as prescribed under Section 9 D of Central Excise Act has not been followed. The plain reading of sub section (1) of section 9D of the Act makes it clear that clause (a) and (b) of the said section sets out following circumstances in which a statement made and sanctioned by a person before Central Excise Officer of a gazetted rank during the course of inquiry or proceedings under the Act, shall be relevant for the purpose of proving the truth of the facts contained therein - departmental investigating agencies as well as the adjudicating agencies have not yet started observing compliance of mandatory statutory provisions i.e. section 9D of Central Excise Act, 1944 and section 138 B of Customs Act, 1962 without which the statement recorded at the stage of inquiry / investigation will not be relevant for the purpose of proving the truth of requisite facts during prosecution. It is observed that the documents recovered at the investigation stage are nothing but third party evidence for want of their author not being investigated / examined by the Department. Third party evidence cannot be relied upon to confirm the allegations as that of clandestine removal - Otherwise also there is no corroborative evidence as is required to prove the charges of clandestine removal. The demand based on the documents, also has wrongly been confirmed by Commissioner (Appeals) - appeal allowed.
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