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2022 (12) TMI 901 - AT - Central ExciseClandestine removal of excisable goods - MS Ingots - third party evidence can be the proof for the allegations or not - presumptions and assumptions - HELD THAT:- The appellants herein M/s. Pankaj Ispat Limited and its Director Shri Pankaj Agrawal are also the manufacturers of the same product. Same allegations based on the same documents of the above mentioned case have been used against both these appellants. Apparently and admittedly, no search was conducted in the premises any of these two appellants. The extract of the relevant statement of Shri Pankaj Agrawal dated 06.06.2016, it is perused that there is absolute denial of Shri Pankaj Agrawal about the documents recovered from M/s. Amit Steels and also about the statement given by its proprietor Shri Narendra Agrawal. Further perusal makes it clear that the allegations of the department against the appellant arose only because of the reason that Shri Narendra Agrawal in his statement dated 07.04.2015 had stated that word “Vikki” stands for M/s. Pankaj Ispat Limited. There are no document in any of these appeals which may corroborate the said statement of Shri Narendra Agrawal or such other document which sufficiently proves that “Vikki” stands for M/s. Pankaj Ispat Limited from no stretch of imagination there seems any correlation between the two - the findings by the Adjudicating Authority below for confirming the allegations of clandestine removal of finished goods (TMT Bars and MS Ingots) by M/s. Pankaj Ispat Limted are without any basis and cogent evidence. The only evidence is third party evidence. No efforts were put by the investigating team to seek corroboration from the documents of M/s. Pankaj Ispat Limited. The confirmation of demand and of allegations on third party evidence is highly unacceptable. There has been catena of decisions wherein it has been held that third party evidence has no evidentiary value and that the same is not at all admissible in law. As far as the proof of allegations of clandestine removal is concerned, it has been a settled law that such grave allegations cannot be confirmed merely on the third party evidence. There otherwise should be clinching evidence about nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. The investigating team would have put some efforts to seek corroboration of the documents recovered from the premises of M/s Amit Steels, had at the stage of investigation itself search in the premises of various manufacturers, raw material providers, transporters etc. would also been conducted and had the persons who were recorded at the stage of investigation would have been produced before the Adjudicating Authorities as well, there could be the evidence to support the department’s investigation at least the appeals of the manufacturers/traders would not have been allowed for the lack of evidence. Departmental authorities are therefore directed to take the cogent steps to formulate certain guidelines for their investigating teams with respect to the compliance of mandatory provisions as that of Section 9D of Central Excise Act and Section 138 B of Customs Act, 1962. Appeal allowed.
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