2018 (5) TMI 1412 – CESTAT NEW DELHI – TMI – Clandestine removal – M.S. Ingots – whether the principal Commissioner in its impugned order in original dated 11.01.2018 is justified in confirming the demand of Central Excise duty of ₹ 2,56,803./- alongwith interest and penalty, in respect of clandestine removal of 80.695 the MT of M.S Ingots recovered from the appellant? – Held that: – In the impugned order nowhere it has been discussed as to how the demand of duty of ₹ 2,56,803/- is sustainable in the absence of any clinching evidence of clandestine manufacture and removal of the goods – There is absolute no evidence on record to show that the appellant-Ms. Ashok Ispat Udyog had cleared 80.695 MT of MS ingots and entire demand is purely based upon the statement of Sh. S.K. Pansari Prop. of M/s. Monu Steel.
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Only on the basis of statement of third person no demand could be made – penalty on Director also set aside.
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Appeal allowed – decided in favor of appellant.
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to the appellant proposing as under: i. Demand of Central Excise duty amounting to ₹ 3,29,78,297/-, quantified on the basis of excess electricity consumption, including the duty of ₹ 2,56,803/-, involved in 80.695 MT of M.S. Ingots, entries of which was found recorded in the diaries of Noticee No. 2, under Section 11 A of the Central Excise Act, 1944. ii Demand of interest under Section 11 AB of the Central Excise Act, 1944. iii impostion of penalties under the provisions of Section 11 AC of the Central Excise Act, 1944 and Rule 25 of Central Excise Rules, 2002. 5. The said Show Cause Notice is mainly based upon the entries made in the records of one M/s. Monu Steel (Prop. Sh. S.K. Pansari). The entire case of the revenue is based upon the records recovered from the said Sh. S. K. Pansari, Prop. of M/s. Monu Steel. At the time of adjudication before the Principal Commissioner M/s. Monu Steel (Sh. S.K. Pansari) did not appear for cross examination despite various opportuniti
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removal of the goods and in view of the fact that the said amount is also included in ₹ 3,29,78,297/- which has been dropped. There is absolute no evidence on record to show that the appellant-Ms. Ashok Ispat Udyog had cleared 80.695 MT of MS ingots and entire demand is purely based upon the statement of Sh. S.K. Pansari Prop. of M/s. Monu Steel. There is no evidence accept the said statement and private dairy of third party i.e. of Sh. S.K. Pansari which contains the name of the appellant. 6. Only on the basis of statement of third person no demand could be made and the same has been held by this Tribunal in a similar matter vide its order dated 04.04.2018 in Appeal No. E/50526-50527/2018 -SM titled as, Shree Consultants Pvt. Ltd Vs. C.C.E. & S.T. Raipur in which this Tribunal set aside the demand which was also made only on the basis of the entries made in the records of M/s. Monu Steel and held as under: xxx xxx xxx 4. I find that the entire case of the Revenue is based u
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case of Raipur Forging Pvt. Ltd. Vs. CCE, Raipur-I – 2016 (335) ELT 297 (Tri.-Del.), CCE & ST, Raipur Vs. P.D. Industries Pvt. Ltd. – 2016 (340) ELT 249 (Tri.-Del.) and CCE & ST, Ludhiana Vs. Anand Founders & Engineers – 2016 (331) ELT 340 (P&H). It stand held in all these judgements that the findings of clandestine removal cannot be upheld based upon the third party documents, unless there is clinching evidence of clandestine manufacture and removal of the goods. In the absence of any corroborative evidence and in view of the law declared in the above decisions, I find no justifiable reasons to uphold the impugned orders. Accordingly, the same are set aside and both the appeals are allowed with consequential relief to the appellants. 7. In view of the above facts of the case and in view of the settled legal position the instant appeal is allowed and the impugned order is set aside. As a result the penalty imposed on Appellant – Shri. Vijay Chand Bothra, Director is al
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