Loose Sheets And Private Diaries Not Sufficient Evidence For Excise Duty Demand: CESTAT

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that loose sheets and private diaries is not sufficient evidence for excise duty demand. R. Muralidhar (Judicial Member) and Rajeev Tandon (Technical Member) stated that mere tallying of certain entries, does not make out these loose sheets to be complete evidence of the purchases and sales and other details pertaining to the assessee. In this case, the assessee/Appellant is manufacturer of Mild Steel Ingots falling under Sub Heading 7206.10.90. The officers of DGCEI conducted simultaneous search operations at their Factory-cum-Office premises and Residential premises of one Surendra Prasad Gupta, Brother-in-law of Musafir Jaiswal (Director0, and also at other premises. One Spiral Binding Pocket Diary was seized purportedly from Directors Chamber. Delible Pencil Handwritten loose sheets, (Trial Balance as per the Revenue) were also seized from the residence. A Show Cause Notice was issued alleging that the assessee has cleared 5816.660 MT of M.S. Ingots of the value of Rs.19,13,71,626/- involving Central Excise duty of Rs.2,16,46,337. After due process, the Adjudicating authority confirmed the demand along with interest and penalty. He also imposed penalty on the Director of the company. The assessee submitted that demand is based on private records and there is no corroborative evidence in support of the charge. No demand can be confirmed on the basis of private records unless it corroborated by bringing in tangible, cogent corroborative evidence based on independent enquiries. The revenue submitted that in the course of the visit, the Dept has recovered the Loose Sheets, which is nothing but the Trial Balance of the company, showing the correct details of the cleared goods. The quantity and value shown in the Trial Balance, is significantly higher than the quantity and value recorded in their statutory records. The bench after considering the factual details like non-finding of the author of these loose sheets, non-tallying of the Debit and Credit figures, figures being written in pencil that too by two different persons, observed that the Loose Sheets cannot be presumed to be the “Trial Balance” as has been assumed by the Revenue to enforce the demand. Their assumption does not have any proper legal footing and hence the same is required to be rejected. No documents towards cash receipt, cash payment etc. have been seized. Neither any vendor has given any statement towards cash sale of the raw materials, nor any buyer has confirmed receipt of finished goods on cash basis, noted the Tribunal. The bench stated that “in the area of corroborative evidence, the investigation has woefully fallen short, by merely clinging on to only the two main seized documents, viz., the Loose Sheets [Trial Balance] and the Pocket Diary [Navneet], which even by themselves do not carry the required clarity to assume that the figures given therein are towards clandestine sales / purchases only.” In view of the above, the Tribunal allowed the appeal. Case Title: M/s DD Iron & Steel Pvt. Ltd. v. Commissioner of CGST & Central Excise, Rourkela Case Number: Excise Appeal Nos. 76871-76872 of 2016 Counsel for Appellant/ Assessee: K. Kurmy Counsel for Respondent/ Department: S. Dey Click Here To Read/Download The Order

Loose Sheets And Private Diaries Not Sufficient Evidence For Excise Duty Demand: CESTAT

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Loose Sheets And Private Diaries Not Sufficient Evidence For Excise Duty Demand: CESTAT

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