Case Details: Ashish Enterprises vs. Principal Commissioner CGST & Central Excise, Bhopal (2026) 39 Centax 291 (Tri.-Del)
Judiciary and Counsel Details
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- Justice Dilip Gupta, President & Ms Hemabika R. Priya, Member (T)
- Shri Hardik Modh, Advocate, for the Appellant.
- Shri S.K. Ray, Authorised Representative, for the Respondent.
Facts of the Case
The assessee was engaged in the manufacture of Zarda and Pan Masala. During the investigation, two diaries recovered from a third-party transporter were relied upon to allege that the assessee had clandestinely manufactured and cleared specified quantities of Zarda and Pan Masala without payment of duty. The diaries contained details of goods received for transport and the number of bags supplied at different locations. Based on these diary entries, a demand was confirmed against the assessee. However, the investigation did not reveal any evidence of procurement of raw materials for the alleged excess production, transportation or clearance of goods without invoices, parallel records, non-excise invoices, vouchers, challans, consignment notes, unaccounted cash, fund transfers, additional manufacturing facilities, use of electric generators, or electricity consumption corresponding to the alleged clandestine manufacture. During cross-examination, the witnesses stated that their statements had been recorded under duress and coercion. The assessee’s proprietor also retracted his statement on the ground that it had been recorded under duress and coercion. Aggrieved by the demand, the assessee filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
CESTAT Held
The CESTAT held that clandestine manufacture and removal of goods could not be established merely on the basis of entries in private diaries recovered from a third party or by the mere mention of the assessee’s name therein, in the absence of corroborative evidence regarding manufacture, transport or clearance of the goods. It further held that unaccounted production could not be established in the absence of evidence regarding the assessee’s manufacturing capacity or other evidence supporting large-scale clandestine production. The Tribunal also found the statements to be unreliable in view of the retractions and the evidence recorded during cross-examination. Accordingly, the allegation of clandestine manufacture and removal was not sustained, and the appeal was allowed.
List of Cases Cited
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- Arya Fibres Pvt. Ltd. v. Commissioner — 2014 (311) E.L.T. 529 (Tribunal) — Relied on [Para 30]
- Commissioner v. Vishnu & Co. Pvt. Ltd. — 2016 (332) E.L.T. 793 (Del.) — Relied on [Para 64]
- Kuber Tobacco Products Ltd. v. Commissioner — 2013 (290) E.L.T. 545 (Tribunal) — Relied on [Paras 26, 34, 64, 88]
- Kumar Trading Company v. Commissioner — 2008 (230) E.L.T. 240 (All.) — Relied on [Para 75]
- Sulekhram Steels Pvt. Ltd. v. Commissioner — 2011 (273) E.L.T. 140 (Tribunal) — Relied on [Paras 26, 88]
- Synergy Steels Ltd. v. Commissioner — 2020 (372) E.L.T. 129 (Tribunal) — Relied on [Para 76]
