CENTRAL EXCISE ACT, 1944

Section 11A(1)

Demand of excise duty - Clandestine Removal - MS Billets - Cogent, positive and concrete evidence to prove the allegation against the assessee

Assessee was engaged in manufacture of MS Billets, D.I. Pipes and Pig Iron. Officers of DGCEI searched the premises of SPRML and some data relating to unaccounted transactions, in external Hard Drives, were recovered. Print-outs of the contents of the hard discs were taken in the presence of authorised signatory of SPRML. CFO of SPRML accepted that the data contained actual receipts and dispatches by SPRML however, it was written in code language. The data included the details of transactions of SPRML with assessee. It appeared that assessee cleared M.S. Billets to SPRML. On the conclusion of investigation, Commissioner issued a Show Cause Notice to assessee seeking to recover Central Excise duty under section 11A(4) along with interest and penalty. Held: It was found that not even single evidence was brought on record to show clandestine removal, conclusively establishing at least in a sample transaction. Having conducted no investigation whatsoever, department cannot confirm the demand only on the basis of documents seized from some other person, more so the contents of which were never accepted by the appellants and cross examination was not allowed. Leaving alone proof with a mathematical precision, in the instant case, evidence made available was not even enough even for a Gross approximation. Therefore, SCN issued raising demand was not sustainable on merits.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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