Clandestine removal cannot be proved by alleged excess wastage alone without corroborative evidence of unaccounted manufacture or clearance.

A charge of clandestine removal in plastic bottle manufacture cannot be sustained merely from alleged excess wastage shown in records. Where wastage is contemporaneously accounted for, stock verification reveals no discrepancy in raw material or finished goods, and there is no tangible evidence of unaccounted manufacture, transport, clearance, or identifiable buyers, the allegation rests only on assumptions and presumptions. In such circumstances, the demand of duty and penalty is not sustainable.

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Issues: Whether the demand of duty and penalty could be sustained on the basis of alleged excess wastage in the manufacture of plastic bottles and alleged clandestine removal of mineral water bottles.

Analysis: The Revenue's case rested essentially on the inference that wastage shown in the statutory records was excessive and that such excess wastage indicated suppression and clandestine manufacture. The records disclosed contemporaneous accounting of wastage, and no discrepancy was found in the stock of raw material or finished goods during the officers' visit. There was also no tangible evidence of manufacture, transport, or clearance of unaccounted goods, nor any reliable material to identify actual buyers. The allegation was therefore founded only on assumptions and presumptions, which was insufficient to establish clandestine removal.

Conclusion: The demand of duty and the penalty were not sustainable.

Ratio Decidendi: A charge of clandestine removal cannot be upheld merely on alleged excess wastage or on presumptions, in the absence of corroborative evidence of unaccounted manufacture, removal, or sale.

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