Clandestine removal cannot be proved by a lone stock discrepancy without corroborative evidence of unaccounted production and clearance.

A demand for central excise duty based on alleged clandestine manufacture and removal of steel ingots failed because it rested only on a solitary stock discrepancy. The tribunal held that an isolated excess of ingots in the factory records, without corroboration such as excess raw material procurement, unaccounted electricity use, proof of clandestine sale, or recovery of sale proceeds, was insufficient to establish clandestine production and clearance. Since such allegations must be proved by reliable supporting evidence and cannot rest on assumptions or presumptions, the demand was held unsustainable and the revenue's appeals were rejected.

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Issues: Whether the demand of central excise duty for alleged clandestine manufacture and removal of steel ingots could be sustained on the basis of a solitary stock discrepancy and without corroborative evidence.

Analysis: The case against the assessee rested essentially on the finding that 8 ingots were found lying in the factory in excess of the bar heat number of ingots shown in the records. The appellate authority had already recorded detailed reasons for rejecting the department's case, noting the absence of corroborative material such as evidence of excess raw material procurement, unaccounted electricity consumption, proof of sale of clandestinely removed goods, or recovery of sale proceeds. A charge of clandestine removal cannot be established merely on assumptions and presumptions or on an isolated discrepancy, and it must be proved by reliable supporting evidence.

Conclusion: The demand was not sustainable and the revenue's appeals were rejected.

Ratio Decidendi: Clandestine manufacture and removal cannot be upheld on the basis of a lone discrepancy in stock or records unless supported by corroborative evidence proving unaccounted production and clearance.

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