2026-VIL-1559-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Clandestine removal of goods – Requirement for affirmative evidence – Duty of Revenue to establish facts through concrete evidence – Appellant-trader was searched and statements were recorded during investigation of alleged clandestine removal of CTD/TMT bars without payment of central excise duty. The original authority and appellate authority relied on statements recorded during investigation and imposed penalty under Rule 26 of Central Excise Rules, 2002 on the contention that appellant had abetted evasion of duty. Appellant pleaded that statements were recorded without following procedure under Section 9D of the CEA, 1944 and that there was no direct evidence of clandestine removal - Whether allegations of clandestine removal and abetment can be sustained on the basis of statements recorded during investigation without affirmative evidence establishing the entire chain of production and supply - HELD - The allegation of clandestine removal cannot be sustained on mere circumstantial evidence without establishing the essential chain of illicit manufacture and clearance. The Revenue must prove allegations through affirmative evidence addressing the entire cycle of production and supply. Diary and notepad seized from premises are insufficient by themselves to prove that goods purchased by the appellant were liable for confiscation. The statements relied upon require corroboration with other concrete evidence of actual clearance including vehicle logs, gate registers, lorry receipts and statements from actual buyers acknowledging receipt of goods. The burden was on the Revenue to prove the allegations and in the absence of such positive evidence, allegations based on assumptions and presumptions are not sustainable. Accordingly, penalty imposed under Rule 26 is not imposable and the order is set aside – The appeal is allowed
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