CX - In case of clandestine removal it is not required for Revenue to prove precise details of each such clearance with 100 per cent accuracy - But, this does not mean that even in total absence of corroborative evidence without at least establishing a preponderance of probability case for confirmation of demands can be made: CESTAT
By TIOL News Service
NEW DELHI, MAR 28, 2016: THE appellants are engaged in the manufacture of Aluminum Alloy ingots and Zinc Alloy ingots. The raw material used were aluminum scrap and aluminum ingots and they availed CENVAT Credit on these raw materials being inputs. The appellants imported the aluminum scrap and purchased Aluminum ingots from M/s. Bharat Aluminum Company and M/s. Hindalco Industries Ltd. and various other dealers.
After verification of stock at the premises of the appellant and recovery of certain documents and a pen drive, a Show Cause Notice was issued alleging clandestine clearance of ingots (inputs), scrap etc and the demands were confirmed.
Before proceed ing with the case, the Bench observed that very little assistance was received from either side as neither the appellants nor Revenue was able to throw light on the entire documents and facts as presented by the case. Neither side made any comprehensive factual presentation, nor could answer satisfactorily when pointed questions were asked on reconciliation of data. This is very important as the impugned order is more than 400 pages long without sequential coherence and having over lapping findings with not so clear analysis of facts.
After hearing both sides elaborately, the Tribunal held:
++ The whole case is built up on data contained in the pen drive and certain statements of persons. Admittedly, the data contained in pen drive is not disputed by the appellant. The whole dispute evolve on the interpretation of the data contained therein. In such a situation, it is necessary for the Revenue to support their interpretation by clear corroborative evidences and not by inferences and assumptions.
++ Even in interpreting the data in the pen drive and taking some support from the select statements of persons, the data applicable to a particular period was extrapolated for the whole period of demand by presuming a standard projection. This apparently is not legally sustainable.
++ When the allegation of unaccounted clearances and substitutions of inputs of huge quantities were made, the minimum requirement is to have independent support of such allegation by way of evidence of transport, cash transaction, third party documents or affirmations etc. Here in this case, corroborations are lacking. In the case of clandestine removal it is not required for the Revenue to prove precise and comprehensive details of each such clearances with 100 per cent accuracy. However, this does not mean that even in the total absence of corroborative evidence without at least establishing a preponderance of probability the case for confirmation of demands can be made.
++ Large number of statements were recorded and also relied upon; but these statements were not put to test by way of cross-examination and analysis or supported by documentary evidence. The statements could be of help if they support evidences which exist and which requires re-affirmation. In the present case, the statements which deal with interpretation of data in pen drive have not thrown any substantial ground to the case built up by the Revenue.
Accordingly, the Tribunal held that the analysis and findings in the impugned order cannot be legally sustained and as such the same requires to be set aside.
(See 2016-TIOL-721-CESTAT-DEL)
