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C.C.E. Raipur Versus Ms. Raigarh Electrodes Ltd.

Clandestine removal of goods - discrepancies found in the figures of raw materials as reflected in the balance sheet and in the excise returns - Held that: - the difference in the balance sheet figures and the statutory records cannot lead to the inevitable conclusion of clandestine activities, Similarly, in the absence of evidence to show that the income reflected in Balance sheet or otherwise is on account of manufacturing activities, the same cannot be held to be sale proceeds of clandestinel .....

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the present appeal. 2. I have heard Shri R K Mishra Ld. AR appearing for the Revenue. Nobody appeared for the respondent. 3. As per facts on record respondent is engaged in the manufacture of sponge iron. During the audit conducted in their factory for the period 2002-03 and 2004-05 certain discrepancies were found in the figures of raw materials as reflected in their balance sheet and in their excise returns. It was further noticed that the assessee had disclosed the unaccounted miscellaneous .....

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de the order of the original Adjudicating Authority by observing as under: "In this context I find that the allegation of clandestine manufacture and removal and the same without payment of duty has been alleged solely on the basis of difference in consumption of raw material in two sets of record, without any tangible corroborative evidence to support such allegation. A demand of duty of ₹ 72,222/- is also raised on the appellant on the basis, of unaccounted receipt / income of ͅ .....

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tine removal is not sustainable. Balance sheet cannot be taken as a sacrosanct document to prove clandestine removal. This was also a view of Hon'ble Tribunal in the following decisions: i) S. Peter Vs. CCE 2007 (5) STR 237 ii) Karan textile Industries Vs. CC 2008 (232) ELT 863 iii) CCE Vs. Vidharbha Winding Wires 2008 (229) ELT 218 In the present case as pointed out during special audit there was some discrepancies in the figure of balance sheet and the statutory records. Such discrepancies .....

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h proves that such amount had been received against their activity on sales of sponge iron manufactured by the appellant. Hon'ble Supreme Court of India in its decision in the case of J.A. Naidu Vs. State of Maharashtra 1983 (13) ELT 161 (SC) have held that mere suspicion, however grave, cannot take the place of proof. This was also a view of Hon'ble Tribunal in the following cases: i) UshaAmorphous Metals Ltd. Vs. CC New Delhi 1995 (76) ELT 631 (CEGAT) ii) LLoysds Steel Industries Vs. C .....

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