Clandestine removal demands need corroborative evidence; a mere mismatch between production records and RG-1 is insufficient.

A demand for duty and penalty based only on a discrepancy between production slips and RG-1 records could not be sustained where there was no independent corroborative evidence of clandestine removal. The explanation that the difference arose from a higher actual burning loss than the loss reflected in production records was not properly rebutted, and the record lacked evidence of excess raw material use, actual clearance, transport, buyers, or flow-back of money. In the absence of such supporting material, clandestine removal was not established and the demand and penalty were held unsustainable.

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Issues: Whether the demand of duty and penalty for alleged clandestine removal could be sustained on the basis of discrepancy between the production slip and RG-1 records in the absence of corroborative evidence.

Analysis: The demand was founded mainly on the difference between the production slip and RG-1. The explanation that the discrepancy arose because burning loss was taken at 1% in the production records while the actual loss was about 2% was not properly appreciated. The record did not disclose independent corroboration such as evidence of excess raw material consumption, actual clearance, transportation, buyers, flow-back of money, or other supporting material. In the absence of corroborative evidence, a charge of clandestine removal cannot rest merely on a comparison of records.

Conclusion: The allegation of clandestine removal was not established and the demand and penalty were unsustainable.

Ratio Decidendi: A demand for clandestine removal cannot be sustained merely on a discrepancy between production records and RG-1 without independent corroborative evidence.

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