In Excise Appeal No. 594 of 2011-CESTAT- CESTAT (Mumbai) holds that clearing goods using delivery memos, without duty paying documents, constituted clandestine clearance
Members Sanjiv Srivastava (Technical) & Suvendu Kumar Pati (Judicial) [03-05-2023]

Read Order: BSS Mines & Minerals Pvt. Ltd. and Ors v. Commissioner Central Excise- Nagpur

LE Correspondent

Mumbai, May 9, 2023: The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the act of clearing the goods using delivery memos, that cannot be correlated with the duty paying documents, constituted clandestine clearance and therefore, the demand for duty against such clearances should be made by invoking the extended period of limitation as provided by the proviso to section 11A (1) of the Central Excise Act, 1944.

In the present case, delivery memos were used by M/s BSS Mines & Minerals Pvt Ltd (appellant 1) for the transportation and clearance of the disputed goods from their premises to the premises of M/s Goodearth Agrochem Pvt Ltd (appellant 2).

The Tribunal opined that appellant No. 1 had deliberately and wilfully suppressed the production and clandestinely cleared Manganese Oxide without paying the required Central Excise duty. They had removed a total of 3361.472 MT valued at Rs. 5,09,00,262/- during the period from 05.12.2006 to 14.10.2009, without issuing excisable invoices and without maintaining the necessary records and thus, this was done with an intention to evade the payment of central excise duty.

“It needs to be understood that the transparency of the documents produced as evidence and their correlation with the evidences produced by the other side as prime evidence by the other side is basic fundamental of the law of evidences. The documents shrouded with secrecy and having incomplete or no information correlating them directly with the evidences produced by other side in any proceedings cannot be accepted as evidence towards the innocence of the person proceeded against in the proceedings of tax evasion”, said the Tribunal.

The Tribunal concluded that the matter at hand was not a case of ignorance of the law, but rather a case of defiance of the law.