Clandestine removal claims fail where job-work challans and records support movement of goods and shortages are only estimated.

Cash vouchers for loading, unloading and shifting charges could not by themselves establish clandestine manufacture or removal where the goods were shown to have been received for job work under declarations and challans issued under Rule 57F, signed by the Central Excise Inspector, and supported by seized job-work records. The alleged shortages of inputs and final products were based on estimate rather than actual weighment, which weakened the Revenue's case. On that record, the material did not support a finding of unaccounted receipt or clearance, and the demand was held not sustainable. The Commissioner's order dropping the adjudication was upheld.

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Issues: Whether the demand alleging clandestine manufacture and removal could be sustained on the basis of cash vouchers and shortages, in the face of evidence that the goods were received and cleared for job work under proper challans.

Analysis: The Revenue relied on cash vouchers showing payment for loading, unloading and shifting charges to infer unaccounted receipt and clearance of goods. The documents on record, however, showed that the goods were received for job work under declarations and challans issued under Rule 57F, and that the challans were signed by the Central Excise Inspector. The relevant job work records had also been seized by the visiting officers. The shortage of inputs and final products was not based on actual weighment but on estimate. In these circumstances, the vouchers were consistent with job-work transportation and handling charges, and the material on record did not support a finding of clandestine removal.

Conclusion: The demand was not sustainable and the appeal was liable to be dismissed in favour of the assessee.

Final Conclusion: The adjudication dropped by the Commissioner was upheld, as the Revenue failed to establish clandestine clearance or any duty liability on the evidence relied upon.

Ratio Decidendi: Where job-work challans and related records show movement of goods under a recognised procedure, cash vouchers for loading and unloading cannot by themselves prove clandestine removal, especially when the alleged shortages are only estimated and not based on actual weighment.

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