Clandestine removal demands fail when shortages are neutralised by excess stock and no corroborative evidence exists.

A demand for alleged clandestine removal based only on factory shortages was not sustainable where the record also showed excess stock that neutralised the shortage. The adjudicating authority had considered the assessee's stock chart and found that the shortage claim stood reconciled. In the absence of independent corroborative evidence of illicit removal, the allegation of clandestine clearance was not established, and the Revenue's challenge failed.

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Issues: Whether the demand based on alleged clandestine removal of 49 air-conditioners, raised only on the basis of shortages detected in the factory, was sustainable.

Analysis: The demand was founded on shortage figures alone. The adjudicating authority had also considered the assessee's chart and found excess stock of 8 air-conditioners, thereby neutralising the alleged shortages. In the absence of independent evidence corroborating clandestine removal, the charge was not established.

Conclusion: The demand was not sustainable and the Revenue's appeal was rejected.

Final Conclusion: The finding that shortages stood neutralised by excess stock, coupled with the absence of corroborative evidence, resulted in rejection of the Revenue's challenge.

Ratio Decidendi: A demand alleging clandestine removal cannot be sustained merely on shortage figures when the record shows reconciliation of shortage with excess stock and there is no independent corroborative evidence of illicit removal.

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