Clandestine removal requires corroborative evidence; stock shortage alone is insufficient to sustain an excise demand.

A charge of clandestine removal cannot be sustained on stock shortage alone. Where the assessee explained the shortage as captive consumption in manufacture, the absence of verification of production and factory records, and the absence of corroborative evidence of raw material procurement, manufacture, transport, buyers, or actual clearances, meant the allegation remained unsupported. The Tribunal reiterated that clandestine removal must rest on positive corroborative evidence and not on suspicion or a mere inventory discrepancy. On that basis, the demand was held unsustainable and the finding went against the Revenue.

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Issues: Whether the charge of clandestine removal of CC Copper Rod was sustainable on the basis of stock shortage alone.

Analysis: The appellant was located in Jammu & Kashmir and was availing exemption under Notification No. 56/2002-C.E. The shortage of CC Copper Rod was explained as arising from captive use in the manufacture of Enameled Copper Wire, but no effective verification of the production records or factory records was undertaken and no corroborative evidence was collected to establish clandestine removal. In the absence of proof regarding procurement of raw material, manufacture, clearances, transportation, or buyers, the alleged shortage by itself was insufficient to sustain the allegation. The Tribunal applied the principle that clandestine removal must be supported by corroborative evidence and cannot rest on suspicion alone.

Conclusion: The charge of clandestine removal was not sustainable and the finding was against the Revenue.

Ratio Decidendi: A demand alleging clandestine removal cannot be sustained on a mere shortage in stock unless it is supported by corroborative evidence establishing unauthorized manufacture and clearance.

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