Clandestine removal demands need positive corroborative evidence; private records and assumptions alone cannot sustain duty or penalties.

Clandestine removal demands cannot be sustained on private register entries alone; the Revenue must produce positive, tangible and corroborative evidence linking the assessee to unaccounted clearances. Here, the alleged demand rested on a private register without examining its author or producing independent proof, while the relied-upon statements were not inculpatory and the higher power consumption was explained by installation of an induction furnace. On that basis, the allegation of clandestine manufacture was treated as unproved, and the duty demand and connected penalties were dropped.

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Issues: Whether the demand of duty and penalties for alleged clandestine removal could be sustained on the basis of entries in a private register without independent corroboration.

Analysis: The demand rested primarily on entries in Register No. 7, described as a private register, without examination of its author and without independent evidence connecting the assessee to unaccounted clearances. The adjudicating authority found that the statements relied upon were not inculpatory, that the alleged trading invoices did not establish clandestine manufacture, and that the higher power consumption was explained by installation of an induction furnace. In clandestine removal cases, the burden lies on the Revenue to produce positive, tangible and corroborative evidence, and findings based on suspicion or presumption cannot be sustained.

Conclusion: The allegation of clandestine removal was not proved and the demand and penalties were rightly dropped.

Final Conclusion: The Revenue failed to establish the case with reliable evidence, and the assessee succeeded in resisting the duty demand and connected penalties.

Ratio Decidendi: Allegations of clandestine removal must be proved by positive and corroborative evidence, and cannot be upheld merely on private records, uncorroborated statements or assumptions.

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