2024-VIL-570-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Section 9D of Central Excise Act, 1944 – Allegation of clandestine removal of goods - Demand of duty – Imposition of penalty – Appellant No.1 is engaged in manufacture of C.I. Pipes, C.I. castings and other cast articles of iron – Acting upon a specific information collected by DGCEI indicating that Appellant has been evading central excise duty by way of clandestine removal of finished products, DGCEI had conducted searches at factory and residential premises of partners and seized various documents – After due process of law, Adjudicating authority confirmed demand of duty payable by Appellant No.1 on account of clandestine removal of goods along with interest and also imposed penalty on all Appellants – Whether allegation of clandestine removal of goods by Appellant No.1 is sustainable – HELD – It is settled principle of law that allegation of clandestine removal must be proved by sufficient evidence and burden of proof in this regard is on Department – Before alleging clandestine removal, Revenue has to establish that Appellant No.1 has procured raw material for manufacturing finished goods + consumption of electricity and mode of transportation of finished goods – Revenue has not established fact that Appellant No.1 was having the capacity to manufacture extra quantity alleged to be clandestinely removed – Case of Revenue is based on statements of buyers and Appellants – Statements recorded during course of investigation have been retracted by Appellants and no cognizance thereof was taken by authorities to ascertain truthfulness of statements as per procedure prescribed under Section 9D of the Act – Documents recovered from premises of Appellant No.1 does not establish that these documents pertains to manufacturing activity by Appellant No.1 – Allegation of clandestine removal of goods by Appellant No.1 is not sustainable, as same has been alleged on assumption and presumption without corroborative evidences – No demand of duty is sustainable against Appellants alleging clandestine removal of goods – Consequently, no penalty can be imposed on Appellants – Amount of duty, interest and penalty paid by Appellant No.1 after adjudication and under protest for entertaining appeals is refundable to Appellant – Appeals disposed of
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