2024-VIL-824-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Section 11AC of Central Excise Act, 1944 – Allegation of clandestine clearance of goods – Demand of duty – Sustainability – Appellant is engaged in manufacture of various packaging items – Appellant also undertook job work on behalf of other principal manufacturers – Appellant has not paid central excise duty on goods cleared under job work challans – Department issued show cause notice to Appellant alleging that Appellant had surreptitiously manufactured excisable goods and removed same without payment of duty under guise of job work – Commissioner confirmed demand of duty along with interest and imposed penalty under Section 11AC of the Act – Whether department has established charge of clandestine removal against Appellant beyond doubt – HELD – Charge of clandestine removal being a serious charge is required to be proved beyond doubt on basis of affirmative evidence and burden of proof in this regard is on department – Appellant undertook job work on behalf of other principal manufacturers and due intimation in this regard was given to Superintendent of Central Excise vide letter – Appellant had specified nature of activities undertaken by them on materials received by them for job work – For purpose of job work, Appellant received paper boards supplied by principal manufacturers under cover of their job challans – Challans submitted by Appellant indicate that they have undertaken only 'printing' work, which does not amount to 'manufacture' – Goods returned by Appellant were in nature of semi-finished goods for further processing, such as punching, pasting, sorting and packing, etc., by principal manufacturers at their factory to make finished goods – Department has not brought any evidence to substantiate allegation that Appellant has actually manufactured finished goods and cleared same under guise of job challans – In absence of any evidence to substantiate allegation of clandestine clearance, demand of duty is not sustainable – Since demand of duty is not sustainable, question of demanding interest and imposing penalty on Appellant does not arise – Impugned order passed by Commissioner set aside – Appeals allowed
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