Certified secondary evidence and corroborative records can sustain duty demand and prove clandestine removal despite missing originals.

Certified secondary evidence, corroborated by internal registers, electricity consumption data, octroi-related details and other surrounding material, can be relied on even when original documents are unavailable if the underlying entries are not disputed. The note further states that the combined evidence of consumption pattern, calendering registers, price structure, instruction book entries, chemical consumption and employee statements supported a finding that processed fabrics were cleared clandestinely under the guise of calendered fabrics. On that basis, the duty demand was sustained, while monetary penalties were reduced and confiscation of plant, machinery and related assets was set aside.

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Issues: (i) Whether the demand of duty could be sustained on the basis of certified secondary evidence, internal records, electricity consumption and allied material despite non-production of originals. (ii) Whether the evidence established that processed fabrics had been clandestinely cleared under the garb of calendered fabrics, and what relief, if any, was warranted in the matter of penalties and confiscation.

Issue (i): Whether the demand of duty could be sustained on the basis of certified secondary evidence, internal records, electricity consumption and allied material despite non-production of originals.

Analysis: The originals of some documents were unavailable, but the relevant electricity consumption figures and the Octroi-related details had been verified and certified by the concerned departmental officers. The internal registers maintained by the assessee, together with the certified statements and the surrounding documentary material, were treated as reliable evidence. The absence of the original papers by itself was held insufficient to exclude the certified material from consideration, particularly when the assessee did not dispute the underlying consumption figures and related entries.

Conclusion: The duty demand was sustainable on the basis of the certified secondary evidence and the corroborative record.

Issue (ii): Whether the evidence established that processed fabrics had been clandestinely cleared under the garb of calendered fabrics, and what relief, if any, was warranted in the matter of penalties and confiscation.

Analysis: The Court relied on the electricity consumption pattern, the internal calendering registers, the price structure, the instruction book entries directing that processing instructions not be written on challans, the chemical consumption data, and the statements of former employees. These materials were found to consistently indicate that the activity undertaken was processing and not mere calendering. The evidence was held sufficient to establish misdeclaration and clandestine removal. However, considering the facts and circumstances, the monetary penalties were reduced and the confiscation of plant, machinery and related assets was set aside.

Conclusion: Clandestine removal was proved, the duty demand was upheld, penalties were reduced, and confiscation was set aside.

Final Conclusion: The appeals failed on the core liability issue, but partial relief was granted by reducing penalties and deleting confiscation.

Ratio Decidendi: Certified secondary evidence, when corroborated by internal records and surrounding circumstances, can sustain a duty demand and establish clandestine removal even if original documents are unavailable.

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