Clandestine removal allegations sustained, with duty demand and penalties upheld where the record failed to rebut contraventions.

In alleged clandestine removal matters, duty demand may be confirmed where the record does not rebut the allegation and the explanation offered is found unsatisfactory. Penalties may also be sustained against the assessee firm and its director where the gravity of the contravention is established and the director is able for day-to-day operations and the resulting lapses. Here, the duty liability and penalties were upheld, and the appeals were rejected on that basis.

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Issues: (i) Whether the duty demand arising from alleged clandestine removal was liable to be confirmed. (ii) Whether the penalties imposed on the assessee firm and its director were justified.

Issue (i): Whether the duty demand arising from alleged clandestine removal was liable to be confirmed.

Analysis: The application for adjournment was not considered for want of the prescribed fee under Section 35B(7) of the Central Excise Act, 1944. On the record, the appellants did not make out a case against the duty demand and the explanation for the alleged clandestine removal was found unsatisfactory.

Conclusion: The duty demand was confirmed.

Issue (ii): Whether the penalties imposed on the assessee firm and its director were justified.

Analysis: The penalty on the firm was upheld in view of the gravity of the case. The director was found responsible for the day-to-day activities of the company and for the lapses, justifying the penalty imposed on him.

Conclusion: The penalties imposed on the firm and its director were confirmed.

Final Conclusion: The appeals were rejected and the adjudicated duty liability and penalties were sustained.

Ratio Decidendi: In a case of clandestine removal, where the record does not rebut the duty demand and the persons concerned are found responsible for the contraventions, confirmation of duty demand and penalty is warranted.

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