2025-VIL-1020-CESTAT-KOL-CE

CENTRAL EXCISE CESTAT Cases

Central Excise – Section 9D of Central Excise Act, 1944 – Allegation of clandestine clearance – Demand of duty – After visiting the factory premises of Appellant and undertaking investigation, department alleged that Appellant has cleared finished goods clandestinely – Department issued show cause notice to Appellant, proposing demand of Excise Duty – After due process, Adjudicating authority confirmed demand along with interest and penalty – Whether department has established case of clandestine clearance of finished goods against Appellant – HELD – There is no documentary evidence relied upon by Revenue towards huge cash purchase that would be required to convert finished goods. No statements have been recorded from purported sellers of raw materials and buyers of finished goods – In search seizure operations, there is nothing to indicate that any private records towards cash in-flow/out-flow has been found – While statements have been recorded from various persons, statement of Contractor, who was actually carrying cutting job-work has not been recorded. Non summoning of Contractor and recording of his statement by asking specific questions to him, would prove to be a costly error on part of Revenue – Statements relied upon by Revenue get vitiated in view of non-following of procedure prescribed in Section 9D of the Act – No serious efforts have been made by Revenue to bring in proper evidence to effect that Appellant have consumed excess raw materials, electricity etc. so as to manufacture finished goods clandestinely and subsequently clear the same clandestinely – Confirmed demand does not legally sustain on merits. Since demand is found to be not sustainable and has been set aside, penalty imposed on Director of Appellant company is also set aside – The appeal is allowed

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