Clandestine removal cannot be proved by stock shortage alone without corroborative evidence of actual clearance and duty evasion.

Allegations of clandestine removal based only on shortage of polished granite slabs could not be sustained where the shortage was explained by waste and breakage from the polishing process. Mere stock shortage, without corroborative evidence of actual clearance to buyers, was held insufficient to prove evasion of duty. The Revenue was required to produce supporting material such as transport evidence, buyer details, and proof of receipt of consideration. In the absence of such evidence, the charge failed and the demand and penalty could not be upheld.

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Issues: Whether the demand and penalty could be sustained on the basis of alleged clandestine removal inferred merely from shortage of polished granite slabs, without corroborative evidence of actual clearance to buyers.

Analysis: The shortage was explained as resulting from waste and breakage generated during the polishing process. Mere physical stock verification and discovery of shortage, by themselves, were held insufficient to establish clandestine removal. To sustain such a charge, the Revenue was required to adduce corroborative material showing actual clearance without duty payment, including evidence of transport, buyers, and receipt of consideration. Since such supporting evidence was absent, the allegation was not proved.

Conclusion: The finding of clandestine removal was not sustainable, and the demand and penalty could not be upheld.

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