Clandestine removal proved by corroborated admissions; duty demand upheld, while redemption fine and personal penalties were reduced.

Admissions in an un-retracted statement, supported by surrounding circumstances and absence of documentary proof, were treated as sufficient to establish clandestine removal of stainless steel ingots and flats. On that basis, the duty demand and equal penalty were upheld because the goods were found without duty-paying documents and the statements corroborated unlawful clearance and movement. The confiscation was sustained, but the redemption fine and personal penalties were reduced on the ground that the original monetary consequences were excessive in light of the value of the seized goods and the duty liability.

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Issues: (i) Whether the demand of central excise duty and the penalties for clandestine removal of S.S. Ingots and S.S. Flats were sustainable; (ii) Whether the redemption fine and personal penalties required reduction.

Issue (i): Whether the demand of central excise duty and the penalties for clandestine removal of S.S. Ingots and S.S. Flats were sustainable.

Analysis: The goods were found without duty-paying documents in the premises of the cutters, and no proof of lawful possession was produced. The director's statement admitted that the S.S. Flats belonged to the manufacturer, had been cleared without invoice, and duty had not been paid. The transporter's statement also supported movement of the goods to rolling mills and cutters. The statements were treated as corroborating clandestine removal and manufacture of the seized flats from non-duty-paid ingots.

Conclusion: The duty demand and the imposition of equal penalty were upheld and the challenge on this issue failed.

Issue (ii): Whether the redemption fine and personal penalties required reduction.

Analysis: Although confiscation was sustained, the value of the seized goods and the corresponding duty liability showed that the fines imposed were excessive. In the interest of justice, the quantum of redemption fine and personal penalties was reassessed downward.

Conclusion: The redemption fines and personal penalties were reduced.

Final Conclusion: The substantive finding of clandestine removal was maintained, but the monetary consequences were moderated by reducing the redemption fine and personal penalties.

Ratio Decidendi: Admissions in a voluntary, un-retracted statement, when corroborated by surrounding circumstances and lack of documentary support, can sustain a finding of clandestine removal and justify duty demand and confiscation, though disproportionate fines and penalties may be reduced on facts.

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