Clandestine removal proved by challans and admission of cash clearances; duty demand sustained and reduced penalty upheld.

Carbon copies of delivery challans, read with the proprietor's admission of clearances without Central Excise invoices or duty payment and of cash sales in the open market, were treated as sufficient to sustain a demand for duty on alleged clandestine removal. The absence of identified buyers or separate independent corroboration did not weaken the Revenue's case on these facts. The reduced penalty already granted by the Commissioner (Appeals) was also left undisturbed, and the penalty under Rule 209A stood set aside for the proprietor. The demand and surviving penalty were therefore sustained.

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Issues: (i) Whether the demand of duty on alleged clandestine removal of excisable goods was sustainable on the basis of delivery challans and the proprietor's statement; and (ii) whether the reduced penalty called for further interference.

Issue (i): Whether the demand of duty on alleged clandestine removal of excisable goods was sustainable on the basis of delivery challans and the proprietor's statement.

Analysis: The delivery challans were treated as carbon copies of original challans and not as rough papers. The proprietor's statement contained an admission of clearance without Central Excise invoices and without payment of duty, and also stated that the goods were sold in the open market for cash. In such clandestine cash transactions, the absence of identifiable buyers or independent documentary corroboration did not weaken the Revenue's case.

Conclusion: The duty demand was upheld and the finding of clandestine removal stood confirmed, in favour of Revenue.

Issue (ii): Whether the reduced penalty called for further interference.

Analysis: The Commissioner (Appeals) had already reduced the penalty on the manufacturing unit after noting prior deposit of the duty amount, and no further ground was found to disturb that relief. The penalty imposed under Rule 209A of the Central Excise Rules, 1944 had already been set aside in respect of the proprietor.

Conclusion: The reduced penalty was upheld and no further interference was warranted, in favour of Revenue.

Final Conclusion: The appeal failed in full, and the duty demand and surviving penalty order were sustained.

Ratio Decidendi: In clandestine removal cases, carbon copies of delivery challans coupled with an admission of cash clearances without duty payment can sustain the demand even without independent buyer-wise corroboration.

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