Clandestine removal can be proved by corroborative records, admissions and buyer statements, sustaining duty and penalty liability.

Corroborative evidence including a recovered notebook, duplicate invoices, stock shortage, seizure of goods in transit, and statements of the director, signatory, accountant and buyers was treated as sufficient to establish clandestine removal of excisable goods. The admissions recorded during investigation were given substantial evidentiary weight, and the lack of effective retraction or rebuttal weakened the defence. On that basis, the duty and cess demand for the relevant period was sustained, with interest and penalty maintained under the penal provisions invoked.

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Issues: Whether the evidence on record established clandestine removal of excisable goods and justified confirmation of duty, interest, and penalty.

Analysis: The recovery of a note book from the factory, the admitted use of duplicate invoices, the shortage of finished goods, the seizure of goods in transit, and the statements of the director, authorised signatory, accountant, and buyers provided mutually corroborative material pointing to clandestine clearances. The admissions recorded in the course of investigation were treated as carrying substantial evidentiary value, and the absence of meaningful retraction or rebuttal weakened the respondent's case. On these facts, the demand for duty and cess for the period January 2004 to March 2004 was held sustainable, and the consequent penalty was upheld under the penal provisions invoked.

Conclusion: The allegation of clandestine removal was established, and the duty, interest, and penalty were confirmed against the respondent.

Final Conclusion: The Revenue's appeal succeeded, and the order of the lower authority was set aside to the extent inconsistent with the finding of clandestine removal and the consequential liability.

Ratio Decidendi: Clandestine removal may be established by a chain of corroborative circumstances, including recovered records, admissions, seizure of goods, and buyer statements, and once so proved, the duty demand and consequential penalty are sustainable.

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