Clandestine removal can be proved by private records and admission, but excess stock confiscation needs evidence of intended illicit clearance.

Private notebook entries matching excise invoices, together with the manager's admission, were sufficient to prove clandestine removal of plywood and sustain the duty demand, despite the investigation being incomplete. The later attempt to retract the admission was treated as an afterthought. Confiscation of excess stock, however, required evidence that the goods were intended for illicit clearance or that steps had been taken for removal without duty; no such material was shown. The duty demand was upheld, the penalty was reduced, and confiscation of the excess plywood was set aside, granting partial relief to the assessee.

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Issues: (i) whether the duty demand on account of clandestine removal of plywood was sustainable on the basis of the private notebook, invoice comparison and the statement recorded from the assessee's representative; and (ii) whether confiscation of the excess found plywood was justified.

Issue (i): whether the duty demand on account of clandestine removal of plywood was sustainable on the basis of the private notebook, invoice comparison and the statement recorded from the assessee's representative.

Analysis: The entries in the private notebook tallied with the corresponding excise invoices in all material particulars except quantity, and the presence of lorry numbers in the notebook indicated that the entries were made at the time of clearance rather than as mere customer orders. The statement of the manager also contained an admission of lapse, and the later attempt to disown it was treated as an afterthought. Though the investigation could have been more complete, the material on record was sufficient to establish clandestine removal and to sustain the duty demand.

Conclusion: The duty demand was upheld.

Issue (ii): whether confiscation of the excess found plywood was justified.

Analysis: Confiscation required evidence that the excess stock was meant for clandestine removal or that steps had been taken for removal without payment of duty. No such evidence was shown in respect of the excess found plywood.

Conclusion: The confiscation was not justified and was set aside.

Final Conclusion: The demand of duty was sustained, the penalty was reduced, and the confiscation of excess stock was annulled, resulting in partial relief to the assessee.

Ratio Decidendi: Private records that correspond with invoice particulars and are supported by an admission may prove clandestine removal, but confiscation of excess stock cannot stand without evidence of intended illicit clearance.

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