Unretracted statements plus transport records can prove clandestine clearance and justify duty and penalty liabilities.

Unretracted inculpatory statements, when corroborated by contemporaneous loading slips, transport records and surrounding circumstances, can establish clandestine clearance. The document notes that movement of goods was reflected in transporter records, duty had been paid only on some slips, and the director admitted removal of goods without duty payment. A later affidavit did not displace the evidentiary value of the earlier statements. On this material, clandestine removal was treated as proved, and the connected duty and penalty liabilities were upheld.

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Issues: Whether the demand and penalties were sustainable on the basis of clandestine clearance proved through loading slips, transport records and unretracted statements.

Analysis: The charge of clandestine clearance was supported by loading slips recovered from the transporters, which showed movement of the goods, by the fact that duty had been paid only on some of the slips, and by the director's inculpatory statement admitting removal of goods without payment of duty. The statements of the transporters and the director were not retracted, and the later affidavit did not displace the evidentiary value of the earlier statement. On this material, the finding of clandestine removal was sustained, and the consequential duty and penalties were justified.

Conclusion: The clandestine clearance was proved and the impugned demand and penalties were upheld against the assessee.

Final Conclusion: The appeals failed, and the order confirming clandestine removal and the connected duty and penalty liabilities stood affirmed.

Ratio Decidendi: Unretracted inculpatory statements, when corroborated by contemporaneous transport records and surrounding circumstances, are sufficient to sustain a finding of clandestine clearance.

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