Clandestine removal proved by torn invoices and admissions, but duplicate duty demand and partner penalty were unsustainable.

Clandestine removal may be established from torn invoices and corroborative statements showing destruction of records after clearance, and the duty demand on that basis was sustained. Duty already paid on seized goods could not be demanded again, so the duplicate demand was set aside. A separate penalty on a partner of the partnership firm was also unsustainable where the firm was the primary liable entity, and that penalty was quashed. The decision distinguishes between proof of evasion through surrounding evidence and impermissible double recovery or redundant penal action against an individual partner.

---

---

Issues: (i) Whether the demand confirmed on the basis of torn invoices and the statement of the authorised signatory for clandestine removal was sustainable; (ii) Whether the amount of duty already paid on seized goods could again be demanded; (iii) Whether a separate penalty could be imposed on a partner of a partnership firm.

Issue (i): Whether the demand confirmed on the basis of torn invoices and the statement of the authorised signatory for clandestine removal was sustainable.

Analysis: The torn invoices and the statement of the authorised signatory disclosed the modus operandi of removal and destruction of invoices after clearance of goods. The absence of invoice number or consignee name did not negate the allegation, as clandestine removal is to be established from the overall evidence and method of clearance. The attempted retraction through an affidavit was not accepted, since it was not shown to have been duly and timely placed before the Department.

Conclusion: The demand of duty on account of clandestine removal was upheld and was in favour of Revenue.

Issue (ii): Whether the amount of duty already paid on seized goods could again be demanded.

Analysis: The record showed that the goods seized during investigation had already been cleared on payment of duty during the relevant period. In such circumstances, the same amount could not be demanded again.

Conclusion: The demand of duty on the seized goods was set aside and was in favour of the assessee.

Issue (iii): Whether a separate penalty could be imposed on a partner of a partnership firm.

Analysis: The appellant was a partnership firm, and the facts did not justify a separate penal consequence against the partner in addition to the firm.

Conclusion: The penalty imposed on the partner was set aside and was in favour of the assessee.

Final Conclusion: The duty demand based on clandestine removal and the related penalty on the main appellant were sustained, but the duplicate duty demand on seized goods and the separate penalty on the partner were quashed.

Ratio Decidendi: Clandestine removal may be proved by recovered invoices and corroborative admissions showing the manner of evasion, but duty cannot be demanded twice for the same goods and a separate penalty on a partner is unsustainable where the firm is the primary liable entity.

---