Demand of Central Excise Duty is not sustainable alleging clandestine removal of Goods: CESTAT deletes penalty

In a recent decision, the Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) overturned penalties imposed on M/s. Dinabandhu Steel and Power Limited for alleged clandestine removal of goods, citing unsustainable demands for Central Excise Duty. The case stemmed from a 2010 search at their premises, during which documents from M/s. Eastern Foods Private Limited (EFPL) were seized. The tribunal noted that the evidence provided—primarily three unauthenticated private documents—lacked corroboration to support claims of duty evasion. Consequently, the tribunal found the demand for excise duty baseless and deemed penalties unjustified. The ruling, issued by a two-member bench, emphasized the absence of sufficient proof linking seized documents to illicit activities. As a result, CESTAT quashed the penalties, allowing the appeals filed by the appellants. This decision highlights the importance of substantiated evidence in excise duty disputes before tribunals.