2018 (7) TMI 523 – CESTAT NEW DELHI – TMI – Clandestine removal – mis-match in respect of quantity of finished goods namely, PVC compound and master batch for the financial year 2012- 2013 – Held that:- Apart from the mis-match of quantity, there is no corroborative evidences – Although the appellants claimed that Chartered Accountant made a clerical mistake of entering figures of raw materials instead of finished goods, while preparing the balance sheet and filing of form 3CD, but since it is not supported by any corroborative evidence, therefore, it did not find favour with the department – The charge of clandestine removal cannot be established merely on the ground of difference in the balance sheet and the statutory record unless the same is corroborated by any other evidence showing receipt of raw material, consumption of the same, production and removal of the final product in excess of statutory records.
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It is settled legal position that charge of clandestine removal and
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y of raw material consumed in place of the figures of quantity manufactured during the year 2012-13, which was the reason for this excess/ shortage. It was also submitted that the difference was due to the burning loss during manufacturing. The appellant also submitted Chartered Accountant s certificate to that effect but the same was not accepted by the department and show cause notice dated 23.2.2016 was issued to the appellant as to why: (i) extended period of five years provided under Sub-section (4) of Section 11A of the Central Excise Act, 1944 should not be invoked for demand & recovery of Central Excise duty not paid by them, by way of suppression of facts and contravention of the provisions of Rules ivid as mentioned above, with intent to evade payment of duty; (ii) the Central Excise duty amounting to ₹ 2,79,022/- involved on the goods valued at ₹ 22,57,457/- found to be accounted for short as per recorded balance are cleared clandestinely without payment of C
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The entire case of the department regarding clandestine removal is based upon mis-match in respect of quantity of finished goods namely, PVC compound and master batch for the financial year 2012- 2013, when the returns were filed by the appellants with the Excise department which were compared with the statement submitted with the Income Tax department in form 3CD. 5. Apart from that, there is no corroborative evidence. Although the appellants claimed that Chartered Accountant made a clerical mistake of entering figures of raw materials instead of finished goods, while preparing the balance sheet and filing of form 3CD, but since it is not supported by any corroborative evidence, therefore, it did not find favour with the department. It is settled legal position that charge of clandestine removal and clearance is serious charge against the manufacturer which is required to be discharged by the Revenue by production of sufficient and tangible evidence and the said principle has been uph
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e statutory record unless the same is corroborated by any other evidence showing receipt of raw material, consumption of the same, production and removal of the final product in excess of statutory records. The burden of proving the clandestine clearance lies upon the Revenue which is to be discharged by production of sufficient and affirmative evidence. It is well settled law that the onus to prove clandestine activities is upon the Revenue and is required to be discharged by production of positive evidence. The demand on the basis of clandestine removal cannot be confirmed on assumption and presumption. The difference in balance sheet and form 3D figures may lead to some doubt but cannot lead to conclusive evidence so as to arrive at inevitable finding of clandestine removal. As such, confirmation of demand of duty or imposition of penalty on the appellant is neither justified nor warranted. There being no evidence in the present case to establish any such clandestine activity, I fin
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