Clandestine removal cannot rest on electricity consumption alone; unsupported assumptions and inadequate inquiry justified remand.

Electricity consumption data, without supporting evidence such as purchase records, transport documents, stock discrepancies or other positive material, cannot by itself establish clandestine removal; at most, it is a corroborative circumstance. Reliance on a general expert report, without any experiment at the assessee's own factory to verify the actual consumption pattern of the machinery, was held arbitrary. Because the adjudication also failed to address the petitioner's principal objections adequately, the order-in-original was quashed and the matter remanded to the adjudicating authority for fresh decision in accordance with law.

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Issues: Whether the order-in-original confirming allegations of clandestine removal could be sustained when it rested substantially on electricity-consumption assumptions and the Dr. N.K. Batra report, and whether the matter required fresh adjudication.

Analysis: The writ petition challenged the adjudication on the ground that electricity consumption figures were treated as substantive proof of unaccounted production and clandestine removal, without adequate supporting material such as purchase records, transport documents, stock discrepancies, or other positive evidence. The Court found that electricity consumption may at best be a corroborative circumstance and cannot, by itself, establish clandestine removal. It further held that reliance on a general report, without conducting any experiment at the assessee's own factory to test actual consumption patterns of the relevant machinery, was arbitrary. The Court also noted that the impugned order did not adequately deal with the principal objections raised by the petitioner.

Conclusion: The order-in-original was quashed and set aside, and the matter was remanded to the adjudicating authority for fresh decision in accordance with law.

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