Clandestine removal demands need reliable evidence; private records alone were insufficient, so fresh adjudication was required.

Private records recovered from an employee, supported only by limited correspondence and bank receipts, were held insufficient by themselves to conclusively establish clandestine removal of excisable goods. The investigation had not reliably disproved the existence of the alleged buyers, nor had it adequately verified the buyers' records or established the production capacity needed to support the full alleged quantity. While the admitted unaccounted clearance of limited value could be considered, the material on record did not sustain the entire demand. The matter therefore required fresh adjudication to determine the quantity and value of duty-drawable clearances after granting the assessee an effective hearing.

---

---

Issues: Whether clandestine removal of excisable goods could be sustained solely on the basis of private records and related material, and whether the demand, interest and penalties required fresh adjudication.

Analysis: The allegation of removal of cotton yarn on cones in the guise of hank yarn rested principally on a private file recovered from an employee, with some correspondence to bank receipts. The private record was not enough by itself to conclusively establish clandestine clearances. The investigation did not reliably disprove the existence of the alleged buyers, nor did it adequately verify the transactions reflected in the buyers' records or establish with certainty the production capacity necessary to support the entire alleged quantity. The admitted unaccounted clearance of limited value could be taken into account, but the material on record was insufficient to sustain the full demand on the basis of the private file alone.

Conclusion: The finding of clandestine clearances could not be sustained in full on the present record, and the matter required fresh adjudication with proper determination of the quantity and value of duty-drawable clearances after granting the assessee an effective hearing.

---