CESTAT Quashes Penalty Demand Made in Mechanical Manner

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT Delhi) in the matter of SANJAY KUMAR GOYAL Vs. COMISSIONER, CENTRAL EXCISE & CUSTOMS Quashed Penalty Demand Made in Mechanical Manner.

The appellant M/s S R Ingots Pvt Ltd. engaged in the manufacture of iron and steel products, that is MS ingots, which are dutiable. The other appellant Shri Sanjay kumar Goyal is the Director of the appellant company and responsible for all the day today activities and particularly looks after the sale and purchase and liaisoning. The appellant is registered with the department.

The appellants Shri Vinay K Jain, inter alia alleges that the whole demand has been raised with penalty, based on unsubstantiated third party records. There is no admission on the part of the appellant or its Director or any officer of the appellant company. Further, Revenue have not examined or investigated the records of the appellants and have issued the show cause notice and confirmed the demand in a mechanical manner without application of mind. Learned counsel states that the charge of clandestine removal and demand of duty, have got grave civil consequences on the appellants, and such demand cannot be raised in a mechanical manner. The allegations of Revenue are bald and unsubstantiated, as there is no corroborative evidence Learned counsel further urges that this Tribunal in similar facts and circumstances in the case of Ramniwas Ispat pvt Ltd. and ors. vs. CCE, Raipur vide Final Order No. 52254-52255/2018 dated 19.06.2018 under similar facts and circumstances of alleged clandestine clearance to Pankaj Ispat, have allowed the appeal holding that demand and penalty is not sustainable on the basis of the third party evidence, in absence of any corroborative evidence/ admission on the part of the assessee.

Further, the contention was that the Revenue have failed to examine its witness in the adjudication proceedings and thus for the absence of compliance with the mandate of Section 9D of the Act, the demand raised relying on the statement of Director of Pankaj Ispat is not tenable, and is fit to be set aside.

The Tribunal Rule Out that, “Having considered the rival contentions I find that the demand have been confirmed against the appellants with penalty in a mechanical manner. I further find there is lack of sufficient evidences or corroborative evidences in support of the allegations of the Revenue. Further following the precedent decisions of this Tribunal in the case of Ramniwas Ispat (supra), I allow both appeals and set aside the impugned order. Both appeals are allowed with consequential benefits.”

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