Clandestine removal requires tangible evidence; approximate consumption calculations alone cannot sustain duty demand or penalty.

A challenge to deletion of duty demand and penalty for alleged clandestine removal failed because the Tribunal's findings were based on the absence of tangible evidence, not on or mere consumption calculations. The alleged demand rested on approximate mass-per-kilometre figures taken from ISI standards, which were only indicative and could not by themselves prove evasion. The court accepted that clandestine removal cannot be sustained solely on raw material consumption or machine-working calculations unless supported by concrete evidence. It found no error, illegality, or substantial question of law in the Tribunal's reasoning, so the Revenue's challenge did not succeed.

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Issues: Whether the Revenue had made out any substantial question of law against the Tribunal's order deleting the main demand and penalty based on alleged clandestine removal and Modvat credit reversal.

Analysis: The Tribunal had held that the departmental demand rested on estimated consumption worked out from approximate mass per kilometre in the ISI standards and not on concrete evidence of clandestine removal. It found that the relevant ISI figures were only approximate and could not, by themselves, sustain the allegation. The Tribunal also relied on the principle that a charge of duty evasion by clandestine removal cannot be upheld merely on calculations of raw material consumption or machine working unless supported by tangible evidence. The High Court found no error or illegality in that reasoning and no basis to disturb the Tribunal's factual findings. The precedent cited by the Revenue was held to depend on its own facts.

Conclusion: No substantial question of law arose, and the Revenue's challenge to the deletion of the principal demand and penalty failed.

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