Clandestine removal proved only by uncorroborated slips and statements did not raise a substantial question of law.

No substantial question of law arose where alleged clandestine removal of cotton yarn failed on the facts. The Revenue relied mainly on slips recovered from the factory and statements of a liaison officer and security assistant, but neither witness had direct knowledge of production or clearance. The author of the slips was not examined, the assessee's responsible officers were not questioned, and some buyer statements were later retracted. In the absence of corroborative evidence, the lower authorities' finding that clandestine removal was not proved was treated as a factual finding, and the appeals were dismissed.

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Issues: Whether the Revenue had made out a substantial question of law arising from the finding that clandestine removal of cotton yarn was not proved on the record.

Analysis: The dispute turned on appreciation of facts. The material relied on by the Revenue consisted mainly of slips recovered from the factory and statements of the liaison officer and security assistant, neither of whom were shown to have direct knowledge of production or clearance. The author of the slips was not examined, the responsible officers of the assessee were not questioned, and the statements of some buyers were later retracted. In the absence of corroborative evidence, the findings of the lower authorities that clandestine removal was not established were treated as factual findings. On that basis, no substantial question of law arose for admission of the appeals.

Conclusion: The Revenue's challenge failed, and the appeals were dismissed.

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