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2018 (9) TMI 454 - HC - Central ExciseClandestine removal - it was alleged that the assessee had failed to inform the Department about the shortage with a clear intention to evade payment of excise duty - extended period of limitation - Whether larger period under Proviso to Section 11A(1) of the Central Excise Act, 1944, could be invoked alleging suppression of facts when stock discrepancy is explicitly disclosed in the annual report? - Held that:- Based on the material available in the annual report, the said show cause notice came to be issued and there was no material placed in the said show cause notice to support the allegation of either willful mis-statement or clandestine removal or suppression of fact or fraud or collusion with an intention to evade payment of duty. Thus, in the absence of such material, the extended period of limitation is not invocable. Whether excise duty can be demanded on the ground of clandestine removal when the Department did not allege clandestine removal at the stage of show cause notice, Order-in-Original and Order-in-Appeal? - Held that:- There was no such material with the Original Authority, when the show cause notice dated 20.6.2007 was issued. The well considered order passed by the Commissioner (Appeals) stood reversed by the Tribunal, which, in our considered view, by a cryptic order, without discussing the facts and circumstances of the case, had not properly appreciated as to what was the allegation against the assessee - Tribunal reversed the order of the First Appellate Authority based on a presumption that if there was a shortage, it would amount to a case of clandestine removal. We do not subscribe to the view taken by the Tribunal. The Tribunal has not recorded any finding of fact. In fact, it has not even given proper reasons as to why the order of the Commissioner (Appeals) requires to be reversed, when the same is a very reasoned order. The Tribunal proceeded merely on assumptions and presumptions and ignored the basic requirement of clinching material to prove the clandestine removal. In the instant case, there is not even enough material to presume the clandestine removal. Thus, the finding of the Tribunal is perverse. Appeal allowed - decided in favor of assessee.
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