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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> Customs, Excise and Service Tax Appellate Tribunal Mere factum of two set of invoices is not sufficient to prove charge of clandestine removal in absence of positive evidence with regard to the same MANU/CK/0019/2024 - (08 Feb 2024) </td> </tr> <tr> <td align="left" valign="top">Sharda Rerollers Pvt Ltd vs. Commissioner of CGST, CX and Customs</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">The facts of the case are that, the departmental officers searched the factory premises of the Appellant and during the course of search some pages containing some entries allegedly Daily Report, three invoices, waybill were found. Statement of the employees of the appellant company were recorded, who stated that the entries made in those documents pertains to clearance of some goods without payment of duty, some on which duty has been paid, therefore, further investigation was conducted and the statement of Managing Director was recorded on 03.05.2013, who gave a contradictory statement to the statement given by the employees. 
Later, on the show cause notice alleging that, the appellant has cleared the goods on the strength of parallel invoices. Some demands sought to be confirmed on the basis of the documents recovered during the course of investigation. The matter was contested by the appellant, but adjudication order was passed confirming the demand proposed in the show cause notice along with interest and penalties on both the appellants were imposed. 
The case has been made out on the basis of rough papers seized during the course of investigation, which were in the possession of the employees of the appellants, who made inculpatory statement at the time of seizure of the documents. But, the Managing Director has controverted the statement made by the employees. Moreover, three parallel invoices on the basis of which demand has been confirmed against the appellants were not examined. Neither an investigation was made with the buyers mentioned in those parallel invoices nor any investigation was made with the transporters. No effort was made to find out, who is the author of those invoices. In the absence of any corroboration to that effect, the demand is not sustainable. 
Moreover, the cross-examination of the employees were not granted to the appellants which is in gross violation of the principles of natural justice in terms of Section 9D of the Central Excise Act and same view was taken by the Hon'ble Apex Court in the case of Andaman Timber Industries vs. Commissioner of C.Ex., Kolkata-II, wherein it has been held that denial of cross-examination is in violation of principles of natural justice when the statement of that person has been relied upon to allege against the assessee. 
Further, without corroboration of the corroborative evidence, the demand cannot be raised against the appellant when appellant has denied the said charge during the course of investigation. Moreover, this Tribunal in the case of S.K.V. Chemicals vs. Commissioner of Central Excise, Pondicherry held that, mere factum of two set of invoices is not sufficient to prove the charge of clandestine removal in the absence of positive evidence with regard to the same. 
Admittedly, in the case at hand no investigation was conducted at the end of the buyers mentioned in the invoices and transporter of the goods. In the absence of the same, the demand cannot be raised against the appellants. Therefore, the impugned demand raised against the main appellant and penalty imposed on both the appellants is set aside. The impugned order is set aside. Appeals allowed.</td> </tr> <tr> <td align="left" valign="top" ></td> </tr> <tr> <td align="left" valign="top" >Tags : Demand, Penalty, Legality</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>