Clandestine removal demands fail without evidence, and stock shortage alone was insufficient where cyclone damage was reported.

A duty demand based on alleged clandestine removal and stock shortage was found unsustainable where the factory had been affected by cyclone and flood, the assessee had informed the Revenue about closure and loss of materials, and remission of duty had been sought. In the absence of direct or indirect evidence proving clandestine removal, the allegation was not established beyond doubt. The stock shortage noted during inspection, in these circumstances, was insufficient to support the charge, and the duty demand was set aside in favour of the assessee.

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Issues: Whether the demand of duty founded on alleged clandestine removal and stock shortage was sustainable in the facts of the case.

Analysis: The factory had been affected by cyclone and flood, the assessee had informed the Revenue about closure and loss of materials, and a request for remission of duty had also been made. On the record, there was no direct or indirect evidence to establish clandestine removal, and the allegation was not proved beyond doubt. The shortage found during inspection, in the circumstances, was insufficient to sustain the charge.

Conclusion: The demand of duty was not sustainable and was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and consequential relief followed.

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