Clandestine removal cannot be proved from octroi records alone without independent corroborative evidence of unaccounted clearance.

Duty demand and penalties for alleged clandestine removal were held unsustainable because the allegation rested only on octroi records and allied material without independent corroborative investigation into the removed goods. The record showed consignees' names in the octroi receipts, but that alone was insufficient to prove unaccounted clearance. The department's claim that more than one consignment had been cleared on a single gate pass was also not supported, particularly where two gate passes had been issued when two consignments were cleared. The legal principle applied was that clandestine removal cannot be established solely from octroi records without independent evidence of suppression.

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Issues: Whether the demand of duty and penalties could be sustained on the basis of octroi records and allied material alleging clandestine removal and suppression of production.

Analysis: The record did not show any independent investigation into the alleged removed goods, even though the names of consignees were reflected in the octroi receipts. The department's allegation that more than one consignment had been cleared on a single gate pass was not supported, particularly when the assessee had issued two gate passes on occasions when two consignments were cleared. The appellate order was founded on an earlier Tribunal decision holding that clandestine removal cannot be established merely from octroi records, and that decision was applicable on the facts.

Conclusion: The duty demand and penalties were not sustainable, and the assessee succeeded.

Ratio Decidendi: Clandestine removal and duty liability cannot be upheld solely on octroi records without independent corroborative evidence of unaccounted clearance.

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