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2010 (11) TMI 943
Issues Involved:
1. Time-barred refund claims u/s 11B of the Central Excise Act.
2. Unjust enrichment in refund claims.
3. Admissibility of refund claims on merits.
4. Interest on refunded duty.
Summary:
1. Time-barred refund claims u/s 11B of the Central Excise Act:
The first set of three refund claims for the months of October to December 1996, amounting to Rs. 70,02,051/-, were found to be beyond the period of six months prescribed u/s 11B of the Central Excise Act and hence rejected as time-barred by the Assistant Commissioner, a decision confirmed by the Commissioner (Appeals). The assessee's contention that the assessments were provisional and thus not subject to the limitation period was dismissed due to a lack of evidence. Consequently, the assessee's appeal was dismissed.
2. Unjust enrichment in refund claims:
In the Revenue's appeal, the refund claims for the period January to June 1997, amounting to Rs. 1,07,98,905/-, were challenged on the grounds of unjust enrichment. The goods were stock-transferred from the factory to the depot and then cleared to buyers with a higher discount, which was not separately indicated in the invoices. The Revenue argued that the issuance of credit notes post-clearance did not alter the fact that the duty burden was passed on to the buyers at the time of clearance. The Tribunal upheld the view that the statutory presumption u/s 12B of the Act was not rebutted by the assessee, and thus, the refund claims were barred by unjust enrichment. The Revenue's appeal was allowed.
3. Admissibility of refund claims on merits:
The Revenue contended that the payment made on goods at the factory gate was based on the assessable value declared under Rule 173C (3) of the Central Excise Rules, 1944, and the revised price declarations filed later did not have retrospective effect. The Tribunal noted that the Commissioner (Appeals) had already held that Section 11B of the Act was independent of Rule 173C, allowing the assessee to claim a refund notwithstanding the rule. However, the Tribunal found no evidence supporting the issuance of credit notes by the assessee to their buyers, thus maintaining the statutory presumption of duty burden transfer u/s 12B.
4. Interest on refunded duty:
Appeal E/3108/06 filed by the Revenue challenged the order of the Commissioner (Appeals) dated 21.7.2006, which allowed a claim for interest on the refunded duty amount of Rs. 1,07,98,905/-. The Revenue argued that the refund itself was unsustainable. The Tribunal, having already set aside the order of refund, allowed this appeal as well.
Disposition:
All the appeals and the Cross Objection were accordingly disposed of.
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2010 (11) TMI 942
The Supreme Court set aside an assessment order dated 27.10.2010 as it was passed without giving the petitioner an opportunity for a personal hearing. The court allowed the first respondent to issue a fresh assessment order after providing the petitioner with a personal hearing. The writ petition was disposed of with these directions, and no costs were awarded.
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2010 (11) TMI 941
Whether there is no violative of Article 14 of the Constitution?
Whether Article 14 of the Constitution does not take away from the State or its instrumentality the power of classification, which to some degree is bound to produce some inequality?
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2010 (11) TMI 940
Supreme Court dismissed Civil Appeals after condoning technical delay. (Citation: 2010 (11) TMI 940 - SC)
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2010 (11) TMI 939
The High Court of Madras dismissed writ petitions as infructuous based on the submission of the petitioner's counsel. No costs were awarded. Connected W.P.M.P. Nos. 8951 and 8952, 9275 and 9276 of 2005 were also dismissed. (2010 (11) TMI 939 - MADRAS HIGH COURT)
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2010 (11) TMI 938
Issues Involved: Seizure of goods and vehicles, illegal detention of vehicles, liability for damages.
Seizure of Goods and Vehicles: The petitioner, a registered transporter, had two vehicles carrying soyabean oil from Kandivili to Kanpur. The vehicles were seized in front of M/s B.L.Agro Private Limited, Bareilly, by the Trade Tax Department on the presumption that the goods were brought for sale to BL Agro. The drivers requested the release of the vehicles as only the goods were seized. The Assistant Commissioner ordered that the goods could be unloaded in containers and then the vehicles could be taken away. However, the petitioner did not challenge this order or unload the oil, leading to further applications for release of the vehicles.
Illegal Detention of Vehicles: The petitioner filed a writ petition seeking the release of the vehicles and compensation for their illegal detention. Despite various notices and opportunities, the vehicles were not released until the Mantora offered to take away the oil and got it released. The Court found that the vehicles had been released, rendering the writ petition infructuous for this relief, leaving only the question of damages.
Liability for Damages: The Court considered the responsibility for the delay in releasing the vehicles and the question of damages. It noted that the Department's order to unload the oil in containers was not followed by the petitioner, and the Mantora delayed taking custody of the goods. The Court concluded that determining liability and damages required evidence beyond the scope of writ jurisdiction, suggesting that a suit for damages was the appropriate remedy. The Court dismissed the writ petition, advising the petitioner to file a suit for the recovery of damages without being influenced by the judgment.
In conclusion, the High Court of Allahabad dismissed the writ petition, stating that the writ jurisdiction was not suitable for determining liability or the quantum of damages. The petitioner was advised to file a suit for damages if they chose to do so, with the assurance that any such suit would be decided without being influenced by the observations made in the judgment.
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2010 (11) TMI 937
The Appellate Tribunal CESTAT Bangalore granted waiver of pre-deposit and stay of recovery to the appellant in a case involving Service Tax demanded for the period of April to September, 2007. The appellant was entitled to exemption under Notification No. 17/2005-ST for Site Preparation or Clearance Service, as per a previous case decision by the bench.
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2010 (11) TMI 936
Whether the land belonging to appellant No.1 is exempted from acquisition in terms of clause (d) of notification dated 13.11.1959 was not decided in the first case and the appeal was dismissed mainly on the ground of delay and contumacious conduct of the appellants?
Whether the land belonging to appellant No.1 is Wakf property and is exempted from acquisition?
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2010 (11) TMI 935
Issues involved: Disallowance of deduction under Section 80IB of the Income Tax Act.
Summary:
The Appellate Tribunal ITAT Ahmedabad heard an appeal by the assessee against the Commissioner of Income Tax (Appeals)'s order regarding disallowance of deduction under Section 80IB of the Income Tax Act. The Assessing Officer had disallowed the claim as the assessee was not registered as an SSI unit under the Industrial Development and Regulations Act, based on a provisional registration certificate. However, the ITAT considered a similar issue in the assessee's case for A.Y.1999-2000 and held that registration is not a pre-condition to avail the benefit of deduction under Section 80IB. The ITAT directed the AO to allow the claim for deduction under Section 80IA in the previous case. The ITAT in the current case also held that the assessee should not be denied the claim of deduction under Section 80IA merely on the technical ground of registration, as the assessee was regarded as an SSI unit by all departments. Therefore, the ITAT directed the AO to allow the claim under Section 80IB in accordance with the law. The assessee's appeal was allowed, and the order was pronounced on 26th November, 2010.
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2010 (11) TMI 933
Renewal of Exemption u/s 80G - Charitable institution/Status - reason for declining such request is that the assessee has received income under the head ‘Advertisements and golf tournaments income’ and it has also incurred substantial expenditure on this activity only - HELD THAT:- The certificate granted to the assessee u/s 12A treating it as charitable institution is subsisting and has not been shown to have been withdrawn till date. If it is so, then, renewal of exemption u/s 80G(5) could not be denied to the assessee. Therefore, there are no justification in rejection of the claim of the assessee unless it is shown that the charitable status granted to the assessee by the certificate issued u/s 12A has been withdrawn.
The Ld. DIT (E) is directed to grant the renewal to the assessee u/s 80G - appeal filed by the assessee is allowed.
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2010 (11) TMI 932
Issues:
1. Demand of duty for printed duplex board sheets under Tariff Heading 4811.90
2. Demand of duty for pouches of papers under Tariff Heading 4819.90
3. Invocation of extended period of limitation on the ground of suppression of facts with intent to evade payment of duty
4. Contestation of limitation by the appellants based on filed declarations
5. Adjudication of the case regarding the sustainability of the suppression of facts allegation
Analysis:
The appellants, engaged in manufacturing printed duplex board sheets and pouches of papers, filed an appeal against the impugned order passed by the Commissioner (Appeals). The issue revolved around two show-cause notices, one demanding duty for printed duplex board sheets and the other for pouches of papers. The extended period of limitation was invoked due to alleged suppression of facts to evade duty, leading to confirmation of the demand by the adjudicating authority and subsequent affirmation by the Commissioner (Appeals).
Regarding the limitation issue, the appellants argued that they had filed necessary declarations for both products, declaring the classification under specific Tariff Headings. The Revenue contended that the appellants did not accurately declare the products, leading to the demand confirmation using the extended period. However, the Tribunal found that the appellants had indeed filed declarations acknowledging the products and their classifications, thus rendering the allegation of suppression of facts unsustainable. As the necessary declarations were filed under Rule 173B of the Central Excise Rules, the extended period of limitation could not be invoked solely based on the alleged misclassification in the declarations.
In the judgment, it was emphasized that the duty demand was made by invoking the extended period of limitation under Section 11A of the Central Excise Act, but since the appellants had filed accurate declarations with acknowledged classifications, the demand was set aside on the grounds of limitation. The Tribunal ruled in favor of the appellants, allowing the appeal and overturning the impugned order, highlighting the importance of filed declarations in determining the sustainability of allegations related to suppression of facts with intent to evade payment of duty.
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2010 (11) TMI 931
Issues:
1. Whether the deduction for the cost of packing claimed to be of durable and returnable nature can be allowed for determining the assessable value of the goods.
2. Whether the deduction of freight on an equalized basis is permissible for determining the assessable value.
Analysis:
Issue 1:
The respondent, a manufacturer of "Pasand" brand Vanaspati, sought deductions for equalized freight and the cost of packing for 15 Kgs. tins, claiming the containers were durable and returnable. The Asstt. Commissioner disallowed these deductions due to the absence of an agreement for return of the containers. On appeal, the Commissioner of Central Excise (Appeals) allowed both deductions. The Revenue appealed this decision, arguing that without an agreement for return, the cost of packing deduction should not be allowed. The Tribunal noted that for packing to be considered returnable, there must be an arrangement for return between the assessee and the customers. As there was no such agreement in this case, the deduction for the cost of packing was disallowed, overturning the Commissioner's decision.
Issue 2:
Regarding the deduction of equalized freight, the Tribunal referred to Section 4(2) of the Central Excise Act, 1944, which allows the exclusion of transportation costs when the price is determined with reference to a place other than the place of removal. Citing the Supreme Court's judgment in Union of India v. Bombay Tyre International, the Tribunal upheld the deduction of equalized freight, stating that even if charged on an average basis, transportation costs are excludable. Consequently, the Tribunal partly allowed the Revenue's appeal, upholding the deduction of equalized freight while setting aside the deduction for the cost of packing.
This detailed analysis of the judgment addresses the key issues involved in the case and provides a comprehensive overview of the Tribunal's decision on each issue, citing relevant legal provisions and precedents.
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2010 (11) TMI 930
Issues involved: Appeal against demand of excise duty, interest, and penalty u/s 11AC of the Central Excise Act, 1944 for non-separate indication of freight amount in excise invoices.
Summary:
The case involved a manufacturer of LPG Cylinders supplying to oil companies based on purchase orders indicating payment of freight to be paid to the manufacturer. The adjudicating authority confirmed a demand of &8377; 2,18,879/- for the period 1-7-2000 to 28-2-2003 due to non-separate indication of freight in excise invoices, with recovery of interest and penalty. The Commissioner (Appeals) set aside the order, leading to the Department's appeal.
The Department contended the grounds of appeal, while the respondent's advocate supported the Commissioner (Appeals) order. The Tribunal noted that the supply was based on purchase orders clearly mentioning freight payment, collected separately through commercial bills. The Department's case lacked evidence that the freight collected exceeded actual costs. Reference to a previous case highlighted that the freight actually incurred was deductible. As the freight collected matched actual costs, the appeal by the Department was rejected.
Therefore, the Tribunal dismissed the Department's appeal, emphasizing the proper indication of freight costs in commercial bills and purchase orders as per the Commissioner (Appeals) decision.
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2010 (11) TMI 929
Issues:
Claim of drawback on re-export of goods under Section 74 of the Customs Act, 1962.
Analysis:
The case involves a revision application filed by the Commissioner of Customs against an order-in-appeal regarding the rejection of a drawback claim on re-exported goods. The goods, imported by M/s. Krishna Enterprises, were re-exported under Section 74 of the Customs Act, 1962, but the drawback claim was denied due to the alleged failure to establish the identity of the re-exported goods with the imported ones.
The Commissioner contended that the order-in-appeal allowing the drawback on re-export was contrary to the provisions of Section 74 of the Customs Act, 1962. Section 74 requires that goods capable of being easily identified, upon which duty has been paid, are eligible for a drawback upon re-exportation. The Assistant Commissioner's report highlighted that only the stickers on the drums matched the Bill of Entry, not the contents, leading to the denial of the drawback claim.
A Show Cause Notice was issued to the respondent under relevant customs and excise acts, but no counter reply was filed. During the personal hearing, the respondent's representative argued in favor of upholding the order-in-appeal as legal and proper.
Upon reviewing the case records and orders, the Government noted that the examination report confirmed the presence of stickers matching the Bill of Entry but failed to establish the identity of the contents of the drums. However, the Shipping Bill declared the goods as "in original packing and not used in India," a statement undisputed by the department. Consequently, the Government agreed with the Commissioner (Appeals) that the identity of the goods was established, leading to the upholding of the order-in-appeal.
Ultimately, the revision application was dismissed for lacking merit, and the impugned order-in-appeal was upheld.
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2010 (11) TMI 928
Issues:
1. Interpretation of Notification No. 223/88 for exemption eligibility.
2. Validity of demand raised beyond the normal period under Sec. 11A of the Central Excise Act, 1944.
Interpretation of Notification No. 223/88 for exemption eligibility:
The case involved a dispute where the Respondent, engaged in manufacturing forgings and forged articles, claimed the benefit of Notification No. 223/88 dated 23-8-88. A show-cause notice was issued against them demanding duty, contending that the benefit was not applicable to forgings and forged articles of other alloy steels. The lower adjudicating authority upheld the demand on merits but rejected it on the limitation of time. The Commissioner (Appeals) observed that the exemption was not automatically extendable to forgings and forged articles of other alloy steels due to the absence of specific inclusion in the Notification. The Commissioner (Appeals) rejected the department's appeal on the limitation of time issue. The Tribunal concurred with the Commissioner (Appeals) and dismissed the department's appeal, emphasizing the specific wording of the Notification and the classification under sub-heading No. 7326.19.
Validity of demand raised beyond the normal period under Sec. 11A:
The department contended that the Respondent misdeclared their product to avail the benefit of the Notification, citing cases where misdeclaration led to suppression with intent to evade duty payment. However, the Tribunal noted that the demand of duty was for a period beyond the normal six-month limit under Sec. 11A, and the department failed to establish any positive action by the Respondent to suppress facts with intent to evade duty payment. The Tribunal highlighted the requirement for the department to prove suppression or misdeclaration by the assessee to invoke the extended period for demand. The Tribunal differentiated the present case from the cited case laws, emphasizing the lack of similarity in facts. Ultimately, the Tribunal upheld the Commissioner (Appeals) order and dismissed the department's appeal, finding no infirmity in the lower authorities' findings regarding the limitation of time.
This judgment clarifies the interpretation of Notification No. 223/88 for exemption eligibility and highlights the importance of establishing suppression or misdeclaration to invoke the extended period for demand under Sec. 11A of the Central Excise Act, 1944. The decision underscores the necessity for clear evidence of intentional evasion of duty payment to justify demands raised beyond the normal statutory period.
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2010 (11) TMI 927
Issues involved: Appeal against disallowance of Cenvat Credit on welding electrodes as capital goods.
Summary:
Issue 1: Disallowance of Cenvat Credit
The appellants, engaged in sugar and molasses manufacturing, claimed Cenvat credit on welding electrodes used for plant maintenance. The Assistant Commissioner disallowed the claim, leading to an appeal which was dismissed by the Commissioner (Appeals).
Issue 2: Legal Arguments
The appellants argued that even if credit as inputs was not admissible, it should be allowed as capital goods based on precedents from various High Courts and Tribunals. The Departmental Representative cited settled law that disallowed such credit.
Issue 3: Precedents and Tribunal Decisions
The impugned order referred to a Larger Bench decision stating that welding electrodes used for repairs are not considered capital goods for Cenvat credit. The Tribunal's decision in Vikram Cement's case reiterated that welding electrodes for maintenance do not qualify as inputs for credit.
Issue 4: Apex Court Confirmation
The decision highlighted that the Apex Court dismissed an appeal related to a similar case, confirming the Tribunal's view on the matter. It emphasized that the Tribunal's decision in Jaypee Rewa Plant's case, followed in SAIL's case, was binding.
Issue 5: Binding Precedents
The observations of High Courts were deemed incongruent with the Apex Court's decision, emphasizing the binding nature of the Tribunal's decisions. The finding that welding electrodes were not capital goods for credit was unchallenged by the appellants.
Conclusion
The Tribunal found no fault in the impugned order disallowing Cenvat credit on welding electrodes, as they were used for repairs and maintenance, not in manufacturing processes. Consequently, the appeal was dismissed.
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2010 (11) TMI 926
Issues involved: Appeal against Order-in-Appeal setting aside refund of redemption fine and penalty.
Summary:
1. The appellant exported ladies nighties misdeclared as woven fabrics, leading to confiscation of goods. The appellant appealed against the Order-in-Original, which was partially set aside by CESTAT. Subsequently, the lower adjudicating authority allowed the refund of redemption fine and penalty. The department appealed against this decision, leading to the current appeal.
2. The appellant argues that the department is obligated to implement CESTAT's order and that the doctrine of unjust enrichment does not apply to the refund of redemption fine and penalty. They cite relevant judgments to support their contention.
3. The Commissioner (Appeals) relied on a specific judgment regarding unjust enrichment in the case of fine and penalty. The appellant challenges this application of the judgment and argues that the decision was wrongly applied in their case.
4. The ld. JDR supported the findings of the Commissioner (Appeals).
5. Upon review, it was found that the refund arose from CESTAT's order, making the appellant eligible for the refund. The issue at hand is whether the doctrine of unjust enrichment applies to the refund of redemption fine and penalty. The Commissioner (Appeals) order was deemed self-contradictory in its application of relevant judgments.
6. The High Court's ruling clarified that the principles of unjust enrichment do not apply to redemption fine and penalty. The Act itself distinguishes between duty and fine/penalty, indicating that unjust enrichment does not apply to the latter. Therefore, the Commissioner (Appeals) order was set aside, and the appeal was allowed.
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2010 (11) TMI 925
Issues: Disallowance of SSI exemption based on brand name affixed on goods.
In this case, the main issue was the disallowance of the benefit of Small Scale Industries (SSI) exemption claimed by the appellants under Notification No. 175/86-C.E. for 'domestic electrical appliances' (mixies) due to the presence of the brand name "A TTK Product" on the cartons and guarantee cards of the goods.
The Tribunal noted that although the appellants marketed their goods under the common brand name "PREETT," the presence of the additional brand name "A TTK Product" on the packaging indicated a connection in the course of trade between the 'TTK Group' and the mixies. The Tribunal referred to Explanation VIII to Notification No. 175/86, which defines 'brand name' or 'trade name' as a name or mark indicating a connection in the course of trade between the specified goods and a person using such name or mark. It was established that the TTK Group and other TTK companies using the same brand name were not eligible for SSI exemption.
Based on the above analysis, the Tribunal upheld the demand, ruling that the appellants were not eligible for the SSI exemption due to the presence of the brand name "A TTK Product" on the goods. However, the Tribunal granted the benefit of cum-duty price to the appellants and allowed them to avail MODVAT credit after verifying the duty paid nature of inputs used in manufacturing the mixies.
Ultimately, the appeal was partly allowed by the Tribunal, with the operative portion of the order pronounced in open court on 12-11-2010.
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2010 (11) TMI 924
Issues:
1. Interpretation of Notification No. 108/1995 for exemption eligibility.
2. Imposition of penalty under Section 11AC of the Central Excise Act, 1944.
Issue 1: Interpretation of Notification No. 108/1995 for exemption eligibility
The case involved a dispute where the respondent had entered into an agreement with West Bengal State Electricity Board (WBSEB) to supply items based on a certificate of exemption under Notification No. 108/1995. However, the Department later discovered that the Japan Bank for International Co-operation (JBIC) was not an authorized authority to finance the project, rendering WBSEB ineligible for exemption. The respondent was issued a show-cause notice demanding duty, interest, and penalties. The lower appellate authority sustained the demand but waived the penalty, leading to the Revenue's appeal before the Tribunal.
The Department argued that the penalty under Section 11AC should be levied as the respondent suppressed the fact that JBIC was not an approved international organization for project financing. They cited legal precedents reversing earlier decisions and emphasizing the mandatory penalty under Section 11AC when its conditions are met. The Department contended that the respondent's actions warranted penalty imposition.
On the other hand, the respondent contended that they relied on WBSEB's certificate for exemption eligibility, regularly filed RT-12 Returns, and did not suppress any facts. They referenced a case where a penalty was dropped based on similar facts. They argued that they acted in good faith based on the certificate's information and had no intention to deceive the Department.
The Tribunal analyzed the facts and held that the respondent's reliance on WBSEB's certificate, which was within the Department's knowledge, did not indicate fraudulent intent. The Tribunal cited a similar case where penalties were dropped due to lack of suppression of facts. Consequently, the Tribunal upheld the lower appellate authority's decision, rejecting the Revenue's appeal.
Issue 2: Imposition of penalty under Section 11AC of the Central Excise Act, 1944
The Tribunal examined whether the respondent's actions warranted the imposition of penalties under Section 11AC. It was established that the respondent cleared goods to WBSEB based on a certificate indicating exemption eligibility under Notification No. 108/1995. The Tribunal found no evidence of fraudulent intent, collusion, willful misstatement, or suppression of facts by the respondent. As a result, the Tribunal concluded that the penalty under Section 11AC was not applicable to the respondent. The penalties on various representatives of the respondent under Section 11AC of the Central Excise Act, 1944, and Rule 26 of Central Excise Rules, 2001 were also deemed not leviable.
In conclusion, the Tribunal upheld the lower appellate authority's decision, rejecting the Revenue's appeal and confirming that penalties under Section 11AC were not applicable to the respondent.
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2010 (11) TMI 923
Issues: Unexplained shortage of finished goods, payment of duty before show cause notice, penalty under Section 11AC, corroboration for clandestine removal, role of authorised signatory in penalty
In this case, the main issue was the unexplained shortage of finished goods noticed during an officer's visit. The respondent company paid the duty amount promptly after the shortage was detected. The original authority imposed a penalty under Section 11AC of the Central Excise Act, 1944, along with confirming the duty demand. On appeal, the Commissioner (Appeals) set aside the penalty, citing lack of corroboration for the allegation of clandestine removal and the duty payment before the show cause notice as reasons. The Tribunal noted that every shortage cannot be presumed as clandestine removal without evidence. The absence of any confession or supporting evidence led the Commissioner (Appeals) to conclude that the original authority's finding of clandestine removal was not substantiated.
Regarding the penalty under Section 11AC, the Tribunal agreed with the Commissioner (Appeals) that since there was no corroboration for clandestine removal, the conditions for invoking Section 11AC were not met. Therefore, the penalty was rightly set aside. Additionally, the Tribunal found no specific role attributed to the authorised signatory in any misdeed, leading to the justification of setting aside the penalty on the signatory as well.
Ultimately, the Tribunal rejected the appeals filed by the department, upholding the decision of the Commissioner (Appeals) to set aside the penalty under Section 11AC due to lack of corroboration for clandestine removal and the absence of evidence implicating the authorised signatory in any wrongdoing.
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