Clandestine removal requires corroborative evidence of production, inputs and clearances; private records alone are insufficient.

A charge of clandestine manufacture and removal of M.S. ingots cannot be sustained on private records and suspicion alone; it requires reliable, corroborative evidence of production, raw material consumption and actual clearances. The Tribunal found the small pink gate passes, parallel log sheets, scrap inward reports and production analysis reports insufficiently supported by independent material. No purchaser or raw material supplier statements were recorded, no excess finished stock or raw material discrepancy was found, and the surrounding circumstances undermined the alleged records. On that basis, the alleged clandestine removal was not proved and the demand of duty, interest and penalties failed.

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Issues: Whether the evidence on record established clandestine manufacture and removal of M.S. ingots without payment of duty, so as to sustain the demand of duty, interest and penalties.

Analysis: The case rested on small pink gate passes, parallel log sheets, scrap inward reports and production analysis reports. The Tribunal found that these materials were not sufficiently corroborated. No statement of any purchaser of the alleged cleared goods was recorded, no statement of any supplier of raw material was brought on record, and no excess stock of finished goods or discrepancy in raw material was found during surprise visits. The relied-upon records were also undermined by surrounding circumstances, including the existence of parallel log sheets on holidays and during closure periods, doubtful peak-load production entries, conflicting production records, and the absence of supporting evidence showing purchase and consumption of additional raw material or other inputs commensurate with the alleged excess production.

Conclusion: The allegation of clandestine manufacture and removal was not proved and the demand of duty, interest and penalties could not be sustained.

Ratio Decidendi: A charge of clandestine manufacture and removal must be supported by reliable, corroborative evidence of production, raw material consumption and clearances, and private records or suspicion alone are insufficient.

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