Clandestine removal must be proved by corroborative evidence; private records and suspicion alone cannot sustain duty demand or penalties.

Private records and statements alone were insufficient to sustain a duty demand for clandestine manufacture and clearance where they were not properly linked to the assessee. The evidence failed to establish authorship or ownership of the documents, trace buyers, prove receipt of sale proceeds, or show corroborative indicators such as excess raw material use, abnormal power consumption, or unaccounted money. Suspicion could not replace proof, so the demand, interest and penalties were set aside and the proceedings dropped in favour of the assessee.

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Issues: Whether the duty demand, interest and penalties were sustainable on the basis of private documents and statements, without adequate corroborative evidence of clandestine manufacture and clearance.

Analysis: The demand rested on seized private records and statements, but the records were not satisfactorily linked to the assessee. The seized documents were not properly examined to establish authorship, ownership, or nexus with the assessee's clearances. The investigation also failed to trace buyers, establish receipt of sale proceeds, verify raw material flow, or produce other corroborative material such as excess raw material consumption, power consumption, or unaccounted money. Suspicion arising from private records could not substitute for proof, and clandestine removal required cogent evidence rather than mere probability.

Conclusion: The duty demand, interest and penalties were not sustainable, and the proceedings were liable to be dropped in favour of the assessee.

Final Conclusion: The appeals succeeded because the allegation of clandestine production and clearance was not proved by reliable and corroborative evidence.

Ratio Decidendi: Allegations of clandestine removal cannot be sustained on private records and suspicion alone and must be proved by clear, corroborative evidence establishing actual manufacture, removal and receipt of sale consideration.

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