Clandestine removal demands must be reliably quantified; duty was confined to the stock shortage proved on inspection.

Limitation was rejected because, in cases involving suppression of facts and alleged clandestine removals, the relevant consideration is whether suppression or misdeclaration occurred, not the timing of the department's investigation. The demand was therefore not treated as time-barred. On clandestine removal, the seized diary, stock shortage, and recorded statements indicated suppression of clearances, but the record did not support reliable quantification of the full alleged unaccounted removals. Duty was accordingly confined to the amount attributable to the stock shortage actually established on inspection.

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Issues: (i) Whether the demand was barred by limitation. (ii) Whether clandestine removal was established and the duty demand could be sustained in full.

Issue (i): Whether the demand was barred by limitation.

Analysis: The plea of limitation was not accepted. In matters involving suppression of facts and clandestine removals, the relevant consideration is the existence of suppression or misdeclaration, and not merely the stage at which the department completed its investigation.

Conclusion: The demand was not held to be time-barred.

Issue (ii): Whether clandestine removal was established and the duty demand could be sustained in full.

Analysis: The seized diary, the stock shortage noticed on inspection, and the recorded statements indicated suppression of clearances, but the material did not enable a reliable determination of the entire quantity allegedly cleared without payment of duty. At the same time, the shortage found during visit remained established, and the parties agreed on the duty relatable to that shortage. In the absence of dependable quantification of the full alleged clandestine removals, the demand was restricted to the duty attributable to the shortage actually found.

Conclusion: The entire demand was not sustained; duty was confirmed only to the extent of the established stock shortage.

Final Conclusion: The appeal succeeded only in part, with the duty liability confined to the quantified shortage found at the time of inspection.

Ratio Decidendi: Where alleged clandestine removals are not proved with reliable quantification, but stock shortage is established on inspection, duty can be sustained only to the extent of the shortage proved by the record.

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