CESTAT set aside the charges of clandestine removal on the appellant and observed that the same was not sustainable merely based on differences in figures of audit reports and ER-1 return without establishing the parameters of clandestine removal.

Brief Facts:

The appellant allegedly evaded the payment of duty by not mentioning the production and clearance in central excise statutory returns in the form of ER-1 and was issued a show cause notice. After the adjudication of the matter, the demand of demand was confirmed along with interest and imposition of penalty which has been challenged in the appeal.

Contentions of the Applicant:

The learned counsel appearing for the appellant argued that the show cause notice demand was confirmed due to some variation in figures and was not based on any evidence which could show that the appellant had cleared clandestinely manufactured goods. It was further argued that an extended period of limitation was not invocable in the present case as the audit report was a public document.

Observations of the Court:

The tribunal observed that demand was only on the basis of difference in figures in the audit report and ER-1 return and apart from differences in figures in financial records and ER01 returns, no investigation was conducted nor was any statement recorded and the charge of clandestine removal was a serious offence which could not be established in these circumstances.

It was further observed that merely on the basis of the difference in figures of audit report and ER-1 return without establishing the parameters of clandestine removal was not sustainable.

The decision of the Court:

The appeal was allowed and the impugned order was set aside.

Case Title: M/s. Micky Metals Limited vs. The Commissioner of Central Excise, Bolpur

Coram: Hon’ble Mr. Ashok Jindal Member (Judicial) and Hon’ble Mr. K. Anpazhakan, Member (Technical)

Case No.: Excise Appeal No.162 of 2012

Advocate for the Applicant: Mr. N.K. Chowdhury

Advocate for the Respondent: Mr. S.Mukhopadhyay

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