Clandestine removal requires corroborative evidence; stock shortage and an unverified admission were insufficient to sustain duty demand.

Demand of duty and penalties based on alleged stock shortage was held unsustainable where the shortage was not supported by any actual weighment record or other material showing clandestine removal. The authorised signatory's statement, by itself, was not enough to prove evasion, especially when raw material stock showed no discrepancy and no independent corroborative evidence was produced. The settled principle applied is that clandestine removal must be established by concrete, tangible and corroborative evidence; an admission or shortage entry alone is not conclusive. On that basis, the demand and penalties were set aside in favour of the assessee.

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Issues: Whether the demand of duty and penalties could be sustained on the basis of stock shortage and the statement of the authorized signatory, without corroborative evidence of clandestine removal.

Analysis: The alleged shortage was not supported by any inventory or material showing that the weightment had been actually carried out on an actual weighment basis rather than on an average weight system. The statement of the authorized signatory, by itself, was not sufficient to establish clandestine removal, particularly when there was no discrepancy in the raw material stock and no other independent evidence was produced. The settled principle is that clandestine removal must be proved by the Revenue with concrete and tangible evidence, and an admission, though relevant, is not conclusive by itself.

Conclusion: The demand of duty and the penalties were not sustainable and were set aside in favour of the assessee.

Ratio Decidendi: Allegations of clandestine removal must be proved by concrete and corroborative evidence and cannot rest solely on a shortage entry or an uncorroborated admission.

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