Allegations based on assumptions In The SCN : CESTAT Deletes Penalty

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the allegation of clandestine manufacture and removal of finished goods by the Appellant made in the Show Cause Notice was merely based on assumption and presumption.The bench of P.K. Choudhary (a judicial member) has observed that the charge of clandestine clearance is a serious charge, and the onus to prove the same is on the department to adduce concrete and cogent evidence. In the absence of corroborative evidence, the charge of clandestine clearance cannot be leveled against the assessee.The appellant/assessee was in the business of manufacturing C.I. ingot molds. Pig iron, C.I. scrap, etc. are used as raw materials. Acting on intelligence received by the Directorate General of Central Excise Intelligence, the officers carried out simultaneous search operations. The joint physical stock verification of the finished product was also done, and 71.140 MT of C.I. ingot mould was physically found.The Additional Commissioner confirmed the duty demand for the purported clandestine removal of 1746.200 MT of C.I. moulds and further imposed a penalty under Section 11AC. However, the Additional Commissioner dropped the duty demand on the ground that some of the entries were not related to the appellant. The Additional Commissioner imposed a penalty of Rs. 1.00 lakh under Rule 26 of the Central Excise Rules, 2002, upon Pitabass Chhotray, Director of the Appellant Company, for his purported abetment in the alleged offense committed by the company.The appellant contended that there was no tangible, cogent, or corroborative evidence on record. There is no confession of guilt. No independent investigation was carried out. A simple comparison of private records with the Central Excise Invoice confirmed the demand. There was no corroboration material in the form of excess raw material, installed capacity, manufacture of finished goods, clearance of finished goods, inquiries with buyers of finished goods, inquiries with sellers of raw material, transportation, or flow-back of funds.The tribunal found that in the course of the search operation, no parallel invoices or challans were found. All the invoice books found in the search operation were found to be unused.The tribunal, while allowing the appeal of the assessee, set aside the order and penalty imposed under Rule 26 of the Central Excise Rules, 2002, on Shri Pitabhas Chhotray, Director of the Appellant Company.Case Title: M/s. Maa Foundry Private Limited Versus Commissioner of Central Excise & Service TaxCitation: Excise Appeal No.75571 of 2018Date: 16.11.2022Counsel For Appellant: Advocate K.KurmyCounsel For Respondent: Authorized Representative J.ChattopadhyayClick Here To Read Order

Allegations based on assumptions In The SCN : CESTAT Deletes Penalty

Mariya Paliwala

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Allegations based on assumptions In The SCN : CESTAT Deletes Penalty

Mariya Paliwala

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