Third-Party Records Alone Cannot Prove Clandestine Receipt of Goods: CESTAT Delhi

Anant Steel Pvt. Ltd. Vs Commissioner of Customs (CESTAT Delhi)

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, allowed the appeal filed by Anant Steel Pvt. Ltd. and set aside the penalty of ₹10 lakh imposed under Section 112(b) of the Customs Act, 1962. The penalty had been imposed on the allegation that the appellant had received M.S. Ingots clandestinely removed by M/s New Tech Abrasives Ltd. (NTAL), a Special Economic Zone unit, without payment of customs duty.

The case originated from an investigation by the Directorate General of Central Excise Intelligence (DGCEI), Indore, based on intelligence that NTAL had clandestinely removed large quantities of M.S. Ingots from its SEZ unit without obtaining permission from customs authorities and without payment of duty. During the investigation, the department relied on a ledger and cash book allegedly recovered from the premises of an NTAL employee. Based on entries in these records, it was alleged that NTAL had supplied 952.67 MT of M.S. Ingots to the appellant between March and July 2008 and had received cash consideration for the same.

The department also relied on statements of certain transporters and vehicle owners who allegedly stated that goods were transported from NTAL and unloaded at the premises of various entities, including the appellant. A show cause notice was issued proposing imposition of penalty under Section 112(b) of the Customs Act.