Order date – 03 August 2022

Facts - 

• The appellant’s, M/s Shri Shyam Ingot & Castings Pvt. Ltd, factory was searched by the preventive officers on the basis of certain information and seized several records/ documents.
• The documents revealed that , M/s PIL had purchased total 245.960 MT of MS ingot from the appellant without payment of excise duty, and without cover of central excise invoices, which had also been admitted by Sh. Pankaj Agarwal, Director of M/s PIL.
• A show cause notice dated 08.07.2015 was issued to the appellant for the demand of central excise duty amounting to Rs.7,95,239/- along with interest under Section 11AA/11A(4) and 11AA/11AB of the Central Excise Act, 1944 and imposed penalty under Section 11AC(1)(c) of the said Act.
• The Adjudicating Authority confirmed the penalty and also imposed a penalty of Rs.7,95,239/- on the Director of the appellant under Rule 26 of the Central Excise Rules, 2002
• Aggrieved, the appellant filed for an appeal.

Issue - 

• Whether the excise duty u/s 11AA/11A(4) and 11AA/11AB and penalty u/s Section 11AC(1)(c)  of the Central Excise Act, 1944 been rightly imposed on the appellant?

Order -

• The authorities observed that there is no corroboration of the allegation of Revenue with the record of this appellant. Nor there is any admission of the alleged clandestine transaction on the part of the appellant. The statement of the Director of M/s PIL cannot be used against this appellant both for non-joinder of the parties and also there was a failure on the part of Revenue to examine Sh. Pankaj Agarwal was a witness in the adjudication proceedings.
• Therefore, the appeal was allowed and the impugned order was set aside.