Supreme Court: Borrowers Retain Redemption Rights if Balance is Paid After Auction Deadline  ||  Supreme Court: Non-Confirmation of Seizure under Section 37A Impacts Adjudication Proceedings  ||  SC: Blacklisting After Contract Termination is Not Automatic and Needs Independent Review  ||  Grand Venice Fraud Case: Supreme Court Cancels Bail of Satinder Singh Bhasin  ||  SC: Senior Employee Cannot Claim Same Lesser Penalty As Subordinate; Bank Manager's Dismissal Upheld  ||  Madras HC: Governor Must Follow Cabinet's Advice on Remission Decisions, Regardless of Personal View  ||  Kerala High Court: Entrepreneurs Must Be Protected From Baseless Protests to Boost Industrial Growth  ||  J&K&L High Court: Second FIR Valid if it Reveals a Broader Conspiracy; 'Test of Sameness' is Key  ||  Supreme Court: Expecting a Minor to Respond to a Public Court Notice is ‘Perverse’  ||  SC: Order 23 Rule 1 CPC Applies to S. 11 Arbitration Act, Barring Fresh Arbiration After Abandonment    

Alok Ispat Pvt Ltd vs. Principal Commissioner, Central Tax - (Customs, Excise and Service Tax Appellate Tribunal) (06 Jan 2022)

Only on the basis of statement of third party, no demand could be made

MANU/CE/0008/2022

Excise

The Appellant is engaged in the manufacture of M.S. Ingots, which are dutiable and is registered with the Department. The Appellant has been making regular compliances. The issue involved in present appeal is whether the Respondent commissioner is justified in confirming demand of Rs.6,54,599 (including cess) on the alleged clandestine removal and clearance of 218.220 M.T. of M.S. Ingots, on the basis of third party records, being entry in the diary of Monu Steels (Proprietor, S.K. Pansari), is a broker/ commission agent, who facilitates sales and purchase of Iron and Steel Materials, and also in the records of Gopal Traders (Proprietor, Shri Gopal Krishna Agarwal) is another broker/commission agent, who facilitates purchase and sales of Iron and steel products. Further, equal amount of penalty was imposed under Section 11 AC along with interest. Further, penalty under Rule 26 of the erstwhile Central Excise Rules was also imposed on Monu Steels and Naren Kumar Mishra, Director of the Appellant company and also on Gopal Traders.

In the impugned order, nowhere it has been discussed as to how the demand of duty is sustainable in the absence of any clinching evidence of clandestine manufacture and removal of the goods. The entire demand is based upon the records recovered from S.K. Pansari, Proprietor of Monu Steel. There is no evidence expect the said statement and private diary entry of 3rd party i.e. of Sh. S.K. Pansari, which contains the name of the appellant.

The law as to whether the third party records can be adopted as an evidence for arriving at the findings of clandestine removal, in the absence of any corroborative evidence is well settled. Only on the basis of statement of third party, no demand could be made. The Hon'ble High Court of Judicature at Allahabad in the matter of Continental Cement Company Vs. Union of India and also this Tribunal in the cases of Raipur Forging Pvt. Ltd. Vs. CCE, Raipur, CCE & ST, Raipur Vs. P.D. Industries Pvt. Ltd. and CCE & ST, Ludhiana Vs. Anand Founders & Engineers have categorically held 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. The impugned order is set aside. As a result, the penalty imposed on Director of the Appellant is also set aside. Appeal allowed.

Tags : DEMAND   PENALTY   LEGALITY  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved