Clandestine removal demands require independent evidence; a mere wastage mismatch between records is insufficient to sustain the allegation.

A demand for clandestine removal cannot be sustained merely on a discrepancy between wastage reported in ARE-2 and the Form IV register; independent corroborative evidence of actual removal is required. Where the assessee engaged in export-related manufacture under Rule 19(2) explained the difference and the department produced no material showing diversion of goods into the domestic market, the allegation rests only on inference and fails. The demand based solely on differential wastage was therefore not sustainable.

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Issues: Whether a demand for clandestine removal could be sustained solely on the basis of a difference between wastage shown in ARE-2 and the Form IV register, without independent corroborative evidence.

Analysis: The appellant was engaged in export-related manufacture under Rule 19(2) of the Central Excise Rules, 2001. The demand was founded only on the variation between wastage declared in ARE-2 and wastage reflected in the statutory register. The explanation offered for the difference was not rebutted by any supporting evidence. In the absence of material showing actual removal of goods into the domestic market, the allegation rested only on inference.

Conclusion: The demand based only on differential wastage was not sustainable, and the allegation of clandestine removal failed.

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