Clandestine removal must be proved by tangible corroborative evidence; unverified slips and challans cannot sustain duty demand or penalty.

A charge of clandestine removal requires cogent, convincing and tangible evidence; uncorroborated gate-keeper slips and weighment challans are insufficient to prove actual removal or sale of goods. Where no purchaser is identified, no buyer statement is recorded, and the available statements do not amount to a clear admission, the allegation rests only on presumption and cannot sustain duty demand or penalty. The demand and penalty were therefore set aside in favour of the assessee.

---

---

Issues: Whether the demand of duty and penalty could be sustained on the basis of a gate-keeper slip and weighment challans alone, without corroborative evidence of clandestine removal and sale of goods.

Analysis: The allegation of clandestine clearance was founded on a slip recovered from the gate-keeper and weighment challans issued by the weighbridge. These documents, by themselves, did not establish actual removal of goods from the factory or their sale to identifiable buyers. No statement of any purchaser was recorded, no buyer was named in the documents, and the gate-keeper did not categorically admit clandestine removal. The Executive Director's statement also did not amount to a clear admission of removal without duty payment. In the absence of corroboration, the charge of clandestine removal could not be proved on presumptions or assumptions.

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

Ratio Decidendi: A charge of clandestine removal must be proved by cogent, convincing, and tangible evidence, and cannot rest merely on uncorroborated slips or weighment challans.

---