Private records recovered during investigation cannot prove charge of clandestine removal of goods

Bhardwaj Steels Private Limited Vs Principal Commissioner of CGST & Central Excise (CESTAT Kolkata)

CESTAT Kolkata held that the charge of clandestine removal of goods cannot be proved on the basis of private records recovered during the course of investigation in the absence of any corroborative evidence in support. Accordingly, order set aside and appeal is allowed.

Facts- The appellants are engaged in the business of manufacturer of M. S.Rod and other related products falling under Chapter 72 of the Central Excise Tariff Act, 1985. Post search operations, demand-cum-show cause notice was issued alleging clandestine clearance of finished excisable goods and demanding duty thereon. Being aggrieved with the order of the adjudicating authority, the appellants have preferred the present appeal.

Conclusion- Held that the charge of clandestine removal cannot be alleged on the basis of private records in the absence of any corroborative evidence. We also hold that the statements recorded during the course of investigation, without following the procedure laid down under Section 9D of the Central Excise Act, 1944, cannot be considered as corroborative evidence against the appellants and the other equipments are not admissible without following the conditions as prescribed under Section 36B of the Central Excise Act, 1944. Therefore, we hold that the demand of central excise duty confirmed in the impugned order, along with interest, is not sustainable and accordingly, the same is set aside. As no demand is sustainable against the appellants, we hold that no penalty can be imposed on the appellants. In these terms, the impugned order is set aside and the appeals are allowed, with consequential relief, if any.