Clandestine removal claims require reliable evidence; prima facie excess electricity use justified remand for fresh adjudication.

Allegations of clandestine production and clearance must rest on conclusive, reliable evidence, and prima facie excess electricity consumption can justify fresh scrutiny of the evidentiary record. Although the departmental statements had been discredited in cross-examination, the annexures showing electricity usage, production figures, and other corroborative material still required reassessment to determine whether clandestine removal was established. The impugned order was set aside and the matter was remanded for de novo consideration by the original authority on the demand dispute, with penalty also left open for reconsideration.

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Issues: Whether the order setting aside duty demand for alleged clandestine production and clearance could be sustained when the record indicated prima facie excess electricity consumption and the matter required reconsideration on the evidentiary material.

Analysis: The Revenue's case rested on annexures showing electricity consumption, production figures, and other corroborative material. The existing findings had treated electricity consumption as not the sole basis for demand, but the record also indicated prima facie excess power consumption and the need to examine whether that, together with supporting evidence, established clandestine removal. The statements relied upon by the department had been discredited in cross-examination, yet the evidentiary significance of electricity usage and the supporting material still required fresh appraisal. The matter therefore called for de novo examination by the original authority.

Conclusion: The impugned order was set aside and the matter was remanded for fresh consideration on the issue of clandestine production and clearance.

Final Conclusion: The demand dispute was reopened for de novo adjudication, and the question of penalty was also left for reconsideration by the original authority.

Ratio Decidendi: Allegations of clandestine removal must be examined on the basis of conclusive and reliable evidence, and where the existing record indicates prima facie excess electricity consumption requiring fresh evidentiary appraisal, remand for de novo consideration is appropriate.

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