Clandestine removal sustained on private diary entries and corroborative admissions, while penalty was reduced for excessiveness.

Clandestine removal can be established by private records and mutually corroborative admissions when supported by surrounding circumstances. Here, entries in a proprietor's private diary, together with statements of the proprietor and supervisor, were treated as evidence of unaccounted removals, and the later retraction was rejected as an afterthought. The duty demand was therefore upheld. However, the penalty was considered excessive on the facts and was reduced, granting partial relief only on the penal consequence.

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Issues: Whether the demand of duty on account of clandestine removal was sustainable and whether the penalty required reduction.

Analysis: The demand was based on entries in a private diary maintained by the proprietor and corroborative statements of the proprietor and the supervisor. The entries were treated as reflecting unaccounted removals, and the retraction of the statements was rejected as an afterthought. On that basis, the duty demand was upheld. Considering the facts and circumstances, the quantum of penalty was found excessive and was reduced.

Conclusion: The demand of duty was confirmed. The penalty was reduced to Rs. 50,000.

Final Conclusion: The appeal failed on the merits of duty liability, but partial relief was granted only in respect of the penalty.

Ratio Decidendi: Clandestine removal may be sustained on the basis of private records and mutually corroborative admissions, and a belated retraction does not displace such evidence when supported by the surrounding circumstances.

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