Clandestine removal demands need corroborated evidence and fair hearing; untested statements and undisclosed documents cannot sustain the case.

An adjudication confirming duty, penalty and confiscation was vitiated where the noticee was denied effective access to relied upon documents and meaningful time to examine voluminous records, and was not allowed cross-examination of witnesses whose statements supported the allegation. A demand for clandestine removal requires positive and corroborated evidence, including material such as raw material consumption, electricity use, sales and realization of proceeds; untested statements and incomplete disclosure were insufficient. The matter was remanded for fresh decision after compliance with natural justice and proper furnishing of the material relied upon.

---

---

Issues: Whether the adjudication order confirming duty, penalty and confiscation was vitiated for denial of effective opportunity of hearing and whether the finding of clandestine clearances could be sustained on the material relied upon.

Analysis: The duty demand and penalties were based mainly on goods receipts, statements of transporters, suppliers and a partner of the originating concern, but the relied upon documents were not supplied in legible and complete form despite repeated requests. The noticee was also denied meaningful time to examine voluminous records and to cross-examine the witnesses whose statements formed the basis of the allegation. A finding of clandestine removal requires positive and corroborated evidence, such as proof of raw material consumption, electricity use, sales and realization of sale proceeds. The order did not disclose sufficient corroborative material and the denial of access to the relied upon documents and witnesses amounted to a serious breach of procedural fairness.

Conclusion: The adjudication was held to be vitiated by violation of principles of natural justice, and the matter was remanded for fresh decision after compliance with those principles.

Ratio Decidendi: A clandestine removal demand cannot be sustained on untested statements and undisclosed relied upon documents, and the adjudicating authority must furnish such material and allow cross-examination where requested before deciding the case.

---