Clandestine removal allegations fail without corroborative evidence; unverified documents and memory-based statements cannot sustain duty demand.

Clandestine removal of excisable goods cannot be sustained on anonymous complaints, parallel papers or memory-based statements unless the Revenue produces independent, tangible and corroborative evidence. Where the Department failed to verify excess production, procurement of extra raw materials, transport movements, sale proceeds, receipt of goods by buyers or excess power consumption, the charge remained unproved. Unverified documents written by the same person and unsupported buyer statements were insufficient to establish suppression. The demand for central excise duty and related penalties was therefore unsustainable, and deletion of the duty demand and penalties was restored.

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Issues: Whether the demand of central excise duty and penalties could be sustained on the basis of anonymous complaint, parallel documents and statements of alleged buyers without clinching corroborative evidence of clandestine removal.

Analysis: The documents relied upon by the Department were found to be written by one and the same person, which undermined their genuineness. The record also showed no effective investigation into the alleged excess production, purchase of extra raw materials, transport dispatches, realization of sale proceeds, receipt of finished goods by regular buyers, or excess power consumption. The statements of alleged buyers were based only on memory and were unsupported by documentary proof. In matters of clandestine removal, the Revenue must establish the charge by tangible and sufficient evidence, and the demand cannot rest merely on presumptions, assumptions, or uncorroborated material.

Conclusion: The alleged clandestine sale was not proved, and the demand and penalties were unsustainable. The order of the first appellate authority deleting the demand and penalties was restored.

Final Conclusion: The appeals succeeded because the Revenue failed to prove clandestine removal with reliable corroborative evidence, and the assessee obtained relief from the duty demand and consequential penalties.

Ratio Decidendi: A charge of clandestine removal must be proved by independent, tangible and corroborative evidence; unverified documents, memory-based statements and presumptions are insufficient to sustain duty demand and penalties.

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