Clandestine removal demands corroborated proof; an unsigned note and assumptions cannot sustain duty liability.

Allegations of clandestine manufacture and removal require cogent, corroborated evidence establishing the full chain of procurement, production, consumption, labour, electricity use, sale proceeds, and actual removal. An unsigned, unauthenticated typed note, without proof of authorship or independent verification, cannot by itself sustain a duty demand. Where the material shows only assumptions, suspicion, or unverified inferences, and the assessee produces a plausible explanation for the movement of goods, the charge remains unproved and the demand is not maintainable.

---

---

Issues: Whether the demand of duty and allegation of clandestine manufacture and removal were sustainable on the basis of the alleged receipt of concentrates, an unsigned typed sheet said to contain a modus operandi, and the surrounding circumstances.

Analysis: The demand was founded mainly on the alleged receipt of two consignments of concentrates and on an unsigned, uncorroborated typed sheet recovered from the assessee's records. The material did not establish the essential links normally required in a clandestine removal case, such as procurement of all inputs, consumption of raw materials, electricity usage, labour deployment, production figures, sale proceeds, or actual removal. The assessee produced evidence suggesting diversion of the consignments to another unit, and the allegation that the goods were later used for clandestine production remained unsupported by dependable corroboration. An unsigned and unauthenticated note, without proof of authorship or independent verification, could not by itself sustain such serious allegations. A notice and demand resting on assumptions, presumption, and suspicion, without tangible evidence, were held insufficient.

Conclusion: The allegations of clandestine manufacture and removal were not proved, and the duty demand could not be sustained.

Ratio Decidendi: In a case of alleged clandestine manufacture and removal, the Revenue must establish the charge by cogent and corroborated evidence, and an unsigned document or unverified inference cannot replace proof of actual production and removal.

---