Clandestine removal requires corroborative evidence; a stock discrepancy and estimated weighment alone will not sustain demand or penalty.

Clandestine removal cannot be inferred from a stock discrepancy where the goods covered by job work challans were accounted for at another premises of the same job worker and the quantity difference was attributable to estimated weighment rather than actual physical verification. In the absence of corroborative evidence such as unaccounted raw material, abnormal electricity consumption, buyer statements or other material showing secret clearance, the alleged shortage was insufficient to sustain duty demand, confiscation or penalty. Clearances of semi-finished goods for job work, on these facts, did not justify an adverse inference. The allegation failed and the Revenue's appeal was dismissed.

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Issues: Whether the goods found at the job worker's other premises and the alleged stock shortage established clandestine removal so as to sustain duty demand, confiscation and penalty.

Analysis: The goods covered by job work challans were found at another plot of the same job worker, and the records showed that the goods had been properly accounted for. The difference in quantity was explained as arising from estimated weighment and not actual physical verification. In the absence of corroborative material such as unaccounted raw materials, abnormal electricity consumption, buyer statements or other evidence of clandestine clearance, the alleged shortage could not support a charge of clandestine removal. The Tribunal also accepted that clearances for job work of semi-finished goods did not, by itself, warrant adverse inference or duty demand on the facts recorded.

Conclusion: The allegation of clandestine removal failed, and the demand, confiscation and penalty were not sustainable. The Revenue's appeal was dismissed.

Ratio Decidendi: Clandestine removal cannot be inferred merely from a stock discrepancy or estimated weighment when the goods are accounted for and no independent corroborative evidence supports the allegation.

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