Clandestine removal allegations and record discrepancies remanded for de novo adjudication with a reasoned order.

Discrepancies between the Daily Production Record and the RG-1 Register, together with the allegation of clandestine removal, were found to require fresh adjudication because the factual appraisal was incomplete. The record showed weight variations in departmental and textile research tests, and the authority's acceptance of a lower loss percentage was not supported by reasons. Limitation and the effect of the assessee operating under physical control also needed reconsideration on the existing material. The matter was remanded for de novo adjudication and a reasoned speaking order; the demand and penalty were not finally sustained at that stage.

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Issues: Whether the demand of duty and penalty based on discrepancies between the Daily Production Record and the RG-1 Register, and the allegation of clandestine removal, could be sustained, or whether the matter required remand for fresh adjudication.

Analysis: The evidence showed weight variations in tests conducted by the department and by the textile research association, indicating an average loss around the range found in the record. The adjudicating authority accepted a lower percentage of loss as reasonable but did not give reasons for that figure. The dispute on limitation and on the effect of the assessee working under physical control also required reconsideration in the light of the submissions and material already on record. As the factual and legal appraisal was incomplete and the reasoning was not adequately supported, a fresh decision after proper consideration was necessary.

Conclusion: The matter was remanded to the adjudicating authority for de novo adjudication and a reasoned speaking order. The demand and penalty were not finally sustained at this stage.

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