Charge of Clandestine Removal sustainability of

PJ/Case Laws/2011-12/1480

Case: COMMISSIONER OF C. EX., BHOPAL versus L.B. & SONS

Citation: 2011 (274) E.L.T. 271 (Tri - Del.)

Issue:- Clandestine removal - Non-accountal of goods presumed on ground that two invoices had same number and one of them could have been issued from a parallel invoice book – sustainability of.

Brief Facts:- The fact of the case is original authority confirmed the demand of duty with reference to Invoice No. 7, dated 24-12-2001 which was recovered from the premises of respondents on 16-10-2002. It was held that there was already an invoice with the same number dated 5-12-2001 which was accounted for. Therefore, it was held that Invoice No. 7, dated 24-12-2001 could have been issued from a parallel in-voice book and the same represented clearance of unaccounted goods and accordingly demand of Rs. 59,486/- was confirmed and equal amount was imposed as penalty. Commissioner (Appeals) has set aside the demand. This is an appeal by the department against the order of the Commissioner (Appeals) No. 16/BPL/2009, dated 29-1-2009 which was passed in pursuance of remand order No. 128-129/08 SM (BR), dated 6-12-2007.

Appellant’s Contention:- The Appellant has stated that this is their commercial invoice, but this aspect has not been verified by the lower authority.

Reasoning of Judgment: - The CESTAT, Principal Bench has considered the submissions and perused the records. The relevant portion of the finding of the Commissioner (Appeals) on the issue of demand of duty on the disputed invoices is reproduced below: - "However, I have reservations with regard to the imposition of duty of Rs. 59,486/- on biris purported to have been cleared under Invoice No. 7/24- 12-2001. The Appellant has stated that this is their commercial invoice, but this aspect has not been verified by the lower authority. In the said invoice the name of the buyer is distinctly appearing as "Ram Swaroop Gulab Chand, Sitapur". However no investigation was conducted at the buyers end to ascertain the facts. I find that in the referred Final Order-in-Appeal No. 92-93/CE/BPL/2005 dated 29-9-2005, the name of the same buyer i.e. Ram Swaroop Gulab Chand, Sitapur, has appeared and detailed investigations were conducted at their end, which is missing in this case. The demand of duty of Rs. 59,486/- on account of invoice No. 7/24-12-2001 is thus based on presumptions and assumptions and is therefore, not sustained. As a consequence, imposition of penalty of Rs. 59,486/- is also set aside." It has not been shown that the investigating officers have specifically identified the person in whose custody (cupboard from which) the said invoice was recovered. It has also not been shown that investigating officers have taken any efforts to question the buyers mentioned in the said invoices. Under these circumstances, the Commissioner (Appeals) accepted the version of the respondent that Invoice No. 7, dated 24-12-2001 was a commercial invoice and not excise invoice. In the absence of investigation, mere finding of the original authority that need for issue of commercial invoice is not disclosed is not sufficient to fasten duty liability holding that there was clandestine removal. There is no material revealed in the grounds of appeal which can upset the finding of the fact by the Commissioner

Decision:- Appeal rejected.

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PJ/Case Laws/2011-12/1480

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