Clandestine removal findings can stand on corroborated records and statements, while duty must still be correctly recalculated.

Corroborated statutory records, seizure material and consistent statements can support a finding of suppression and clandestine removal of labelled beedies, and belated affidavits or coercion allegations do not necessarily displace that evidence. The duty computation, however, must still be correctly verified where the working is shown to be flawed, including exclusion of Sundays and holidays. Where the core evasion finding is sustained but the calculation is erroneous, limited relief may be granted by reworking the duty and reducing the penalty accordingly.

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Issues: (i) Whether the demand of duty and confirmation of clandestine removal of labelled beedies for the relevant period was sustainable on the basis of the records, seizures and statements; (ii) whether the duty required recalculation by excluding Sundays and holidays and whether the penalty required reduction.

Issue (i): Whether the demand of duty and confirmation of clandestine removal of labelled beedies for the relevant period was sustainable on the basis of the records, seizures and statements.

Analysis: The demand was supported by the stock discrepancies noticed on search, seizure of beedies from the godown, entries in the statutory records, and a chain of statements from the appellant, his son, the accountant, the salesman, the contractors and other persons connected with the factory. The evidence was treated as corroborative and was not displaced by the belated affidavits or the plea of coercion. The finding of suppression of production and clandestine removal was therefore based on substantive material and not on mere presumption.

Conclusion: The demand of duty and the finding of clandestine removal were upheld against the assessee.

Issue (ii): Whether the duty required recalculation by excluding Sundays and holidays and whether the penalty required reduction.

Analysis: While sustaining the core finding on evasion, the duty computation was found to require verification so that Sundays and holidays are excluded from the working. The penalty was also considered excessive in the circumstances and was scaled down.

Conclusion: The duty was directed to be reworked and the penalty was reduced, in favour of the assessee to that limited extent.

Final Conclusion: The adjudication on clandestine removal was substantially sustained, but limited relief was granted on duty computation and penalty.

Ratio Decidendi: A finding of clandestine removal may be sustained on the basis of corroborated statutory records, seizure material and consistent admissions, while the duty liability must still be correctly recalculated where the computation is shown to be erroneous.

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