Merely on the basis of papers/documents found from residence of Director/Employee, it cannot be concluded that the company has removed goods without payment of duty

Last updated: 17 February 2016

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Court :
CESTAT, Delhi

Brief :
The Hon’ble CESTAT, Delhi has relied upon the plethora of judgments and held that merely on the basis of papers/records seized allegedly containing the production & dispatch or statement of any employee/director of the Appellant accepting the facts would not suffice to conclude that the Appellant has removed the goods without payment of duty, in absence of any corroborative evidence. Hence, the demand and penalty against the Appellant and the Director is not sustainable.

Citation :
Sun Ultra Technologies Pvt. Ltd., Shri Sunil Gandhi, MD, Shri Girish Mathur, Prop Vs. Commissioner of Central Excise, Indore

Sun Ultra Technologies Pvt. Ltd., Shri Sunil Gandhi, MD, Shri Girish Mathur, Prop Vs. Commissioner of Central Excise, Indore [2016-TIOL-161-CESTAT-DEL]

Fact

Sun Ultra Technologies Pvt. Ltd. (“the Appellant”) was engaged in the manufacturing of welding rods under the brand name of another person. Arhat is a proprietorship firm owned by the father of director of the Appellant, who was also engaged in the manufacture of welding rods and availing value based exemption. The officer of Department had visited the factory premises of both the concerns and residence of the Director as well as other premises, where the officers found and seized various records & papers which culminated in passing of Impugned Order against the Appellants.

Held

The Hon’ble CESTAT, Delhi has relied upon the plethora of judgments and held that merely on the basis of papers/records seized allegedly containing the production & dispatch or statement of any employee/director of the Appellant accepting the facts would not suffice to conclude that the Appellant has removed the goods without payment of duty, in absence of any corroborative evidence. Hence, the demand and penalty against the Appellant and the Director is not sustainable.