2025-VIL-863-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Clandestine clearance, Reliance on Annual Statistics Report (ASR), Burden of proof - Department alleged that appellant evaded payment of central excise duty by allegedly suppressing the fact of removal of iron scrap and steel scrap - Demand based on a comparison of the despatch figures contained in the Annual Statistics Report (ASR) by the appellant with the clearance of scrap declared in the RT-12 returns - Whether the data available in the ASR, which is a private document compiled by the appellant's Statistics Department for management information purpose, can be the basis to allege clandestine clearance and demand duty on such clandestinely cleared goods - HELD - The data available in the ASR cannot be the basis to allege clandestine clearance and demand duty on such clandestinely cleared goods. The RT-12 returns are prepared based on tariff head wise groupings, whereas ASRs are prepared based on product code suitable for managerial decision making. The differences between the figures in the ASR and RT-12 returns cannot lead to an inference of clandestine manufacture and removal - the Department has not brought any evidence on record to substantiate the allegation of clandestine removal by the appellant. Department is required to establish clandestine manufacture and removal through positive and tangible legal evidence, and not merely by inferences or circumstantial evidence based on assumptions and presumptions. In the absence of evidence like excess raw material procurement, discovery of unaccounted finished goods, statements of buyers, proof of transportation of goods without payment of duty, etc., the allegation of clandestine removal cannot be sustained against the appellant – Further, since the ASRs were regularly submitted to the jurisdictional Central Excise authorities and the Department was aware of the issue, no suppression can be alleged on the part of the appellant. Therefore, the extended period of limitation cannot be invoked and the penalty imposed is also not sustainable - the impugned order is set aside and the appeal is allowed
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