Loose Sheets and Pocket Diary Not Sufficient to Prove Clandestine Clearance of Mild Steel Ingots: CESTAT [Read Order]

CESTAT: Loose Papers Insufficient to Prove Illegal Steel Ingot Removal

In a recent ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that loose sheets and a pocket diary alone are not enough to conclusively prove the clandestine removal of mild steel ingots. The case involved DD Iron & Steel Pvt. Ltd., which faced allegations of illegally clearing goods without proper documentation.

Details of the Case

The revenue department had accused DD Iron & Steel of removing mild steel ingots without paying the necessary excise duties. Their evidence primarily consisted of loose sheets of paper and a pocket diary purportedly containing records of these undocumented transactions. However, CESTAT found this evidence lacking the necessary corroboration to establish the guilt of the company beyond a reasonable doubt.

CESTAT’s Observations

CESTAT emphasized the need for stronger evidence to substantiate such serious allegations. The Tribunal pointed out that:

• The authenticity and reliability of the loose sheets and diary entries were questionable.
• There was no independent verification of the transactions recorded in these documents.
• The department failed to provide any other supporting evidence, such as statements from buyers or transporters, to confirm the alleged clandestine removal.

Implications for Similar Cases

This ruling sets an important precedent for cases involving allegations of duty evasion. It underscores the principle that accusations must be supported by credible and verifiable evidence, rather than relying solely on potentially unreliable documents. It highlights the responsibility of the revenue department to thoroughly investigate and gather substantial proof before leveling charges of clandestine removal against businesses.

The decision is likely to be welcomed by businesses facing similar allegations based on limited or circumstantial evidence. It reinforces the importance of due process and the need for a fair and transparent investigation.