Clandestine removal requires proof beyond recovered invoices, with the burden on the Department to establish actual clearance.

Mere recovery of duplicate invoices or receipt of raw material does not by itself prove clandestine manufacture and clearance; the Department must establish authentication of the invoices, link the alleged unaccounted ingots to actual manufacture, and properly confront relied-upon statements. Where the assessee disputes the invoices and supports that challenge with handwriting evidence, and the Department fails to discharge its evidentiary burden, duty demand and penalties cannot be sustained on those allegations. A separate part of the order relating to loose slips and related demand was not specifically challenged and was upheld.

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Issues: Whether the demand of duty and penalties were sustainable on the basis of recovered duplicate invoices and alleged unaccounted ingots, and whether clandestine removal was proved.

Analysis: The appeal on the loose slips and related demand was not challenged by any specific ground and that part of the order was upheld. On the remaining allegations, the Department did not discharge the burden of proving that the duplicate invoices were authenticated by the assessee's director, especially when the assessee disputed the genuineness of the invoices, relied on a handwriting expert's opinion, and there was no effective confrontation with the relevant statements. The Department also failed to establish that the ingots received from the supplier were actually used for manufacture of saria and thereafter removed without payment of duty. Mere recovery of invoices or mere receipt of raw material was held insufficient to prove clandestine manufacture and clearance.

Conclusion: The Revenue failed to prove clandestine removal and the order dropping the duty demand and penalties was sustained.

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