2026-VIL-1845-CESTAT-BLR-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Clandestine removal of TMT rods/bars alleged on the basis of private records - Demand of duty and penalties on the Appellant company and its Managing Director - Appellant manufactured sponge iron, MS ingots and TMT rods, and the demand was confirmed on the basis of an Executive Diary, a made-up file and a duplicate book seized from the factory, along with statements of employees and the Managing Director, alleging that short accounted MS ingots were used to manufacture TMT rods that were cleared without payment of duty - Whether clandestine removal is established, and the demand and penalties sustainable, on the basis of private records and statements without corroborative evidence - HELD - The Executive Diary showed entries without customer name, date or invoice number, which the Revenue treated as clandestine removal, but there was no evidence on record regarding electricity consumption, transport details, dispatch details or the customers to whom the goods were sold. The short accountal related to MS ingots, which are not final products and were admittedly consumed captively, and the allegation that these were used to manufacture TMT rods was imaginary without corroborative evidence. Neither the Executive Diary nor the made-up file nor the statements of the employees and the Managing Director were corroborated with other evidence to prove clandestine removal. The burden to prove clandestine manufacture and removal lies heavily on the Revenue, and conjectures and surmises cannot be the basis of proof as positive evidence is required - The Revenue has not discharged the burden, and the impugned order is set aside along with the penalties imposed on the Appellant company and the Managing Director, and the appeals are allowed
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