Duty demand cannot rest on rough estimates; Revenue must prove alleged clearance without payment of duty.

A duty demand based on a rough estimate, without corroborative evidence of clearance of waste without payment of duty, was held unsustainable. The appellate authority found that the adjudicating authority relied on conjecture and that the RT-12 return did not contain any column requiring disclosure of waste removal, so no adverse inference could be drawn on that basis. The assessee was not required to prove the negative that the job worker had not sold waste. The burden remained on the Revenue to substantiate the allegation with material evidence, which it failed to produce; the duty demand and penalty were therefore set aside.

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Issues: Whether the duty demand and penalty could be sustained when the demand was founded on rough estimate without supporting evidence and the Revenue failed to produce material to prove clearance of waste without payment of duty.

Analysis: The lower appellate authority held that the adjudicating authority confirmed the demand on a rough estimate and without evidence. It also noted that there was no column in the RT-12 return for disclosure of waste removal, making the adverse inference on that basis unsustainable. The assessee could not be required to prove the negative that the job worker had not sold waste. The burden lay on the Revenue to substantiate its allegation with evidence, which it did not do.

Conclusion: The duty demand and penalty were not sustainable and the appellate order in favour of the assessee was upheld.

Ratio Decidendi: A duty demand cannot be confirmed on conjecture or rough estimate without corroborative evidence, and the burden rests on the Revenue to prove the alleged evasion.

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