Clandestine removal requires independent corroboration; private records and a statement alone cannot sustain excise duty or penalty.

Central excise duty and penalty cannot be sustained for alleged clandestine removal when the department relies only on a private salary file and the Managing Director's statement without independent corroboration. The file was shown to be maintained mainly for wage payment and related lap stage production, while no shortage, excess production, clearances, receipt of sale proceeds, buyers, delivery details, or similar material was proved. In clandestine removal cases, the allegation must rest on clinching evidence of production, removal, and consideration; uncorroborated private records or statements are insufficient. On that basis, the demand and penalty were set aside.

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Issues: Whether the demand of Central Excise duty and consequential penalty could be sustained on the basis of a salary file and the statement of the Managing Director, without independent corroborative evidence of clandestine manufacture and removal.

Analysis: The demand rested essentially on a private salary file said to contain weekly production figures and on the statement of the Managing Director. The records showed that the file was primarily maintained for payment of wages to labourers and also related to lap stage production, while the department did not establish actual shortage, excess production, clearances, receipt of sale proceeds, buyers, delivery details, or any other corroborative material. In clandestine removal matters, the allegation must be supported by clinching evidence, and a mere uncorroborated private record or statement is insufficient to sustain duty demand and penalty.

Conclusion: The duty demand and penalty were not sustainable on the evidence relied upon, and the appeal succeeded in favour of the assessee.

Ratio Decidendi: Clandestine removal cannot be established merely from private records or a statement unless the department adduces independent corroborative evidence of production, clearance, and receipt of consideration.

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