Clandestine removal evidence upheld where delayed retraction and VAT findings failed to dislodge independent excise proof.

Independent corroborative material supported the excise case of clandestine removal, including search results, recorded statements, customer documents and surrounding circumstances. A delayed retraction, unsupported by affidavit and inconsistent with later statements, did not displace the earlier voluntary admissions. The High Court also held that findings in VAT proceedings on the ownership of seized documents did not control excise adjudication, which had to be assessed on evidence collected under excise law. The plea of denial of cross-examination was not sufficient to unsettle the evidentiary basis of the demand. Accordingly, the finding of clandestine removal was upheld and duty, interest and penalty were sustained.

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Issues: Whether the demand of central excise duty, interest and penalty for alleged clandestine removal of excisable goods could be sustained despite the assessee's delayed retraction, the findings recorded in VAT proceedings, and the plea of denial of cross-examination.

Analysis: The Court found that the Excise authorities had not proceeded merely on the basis of inputs from the VAT authorities, but had carried out their own search, recorded the assessee's statements on several dates, and gathered independent corroborative material from documents, customers and other surrounding circumstances. The retraction was made after a long delay, was unsupported by a sworn affidavit, and was not consistent with the assessee's later statements. The Court also held that the VAT authorities' view regarding ownership of seized documents did not bind the Excise adjudication, which had to be tested on the basis of the material independently collected under the Excise law. The plea regarding cross-examination was not found to displace the substantial evidentiary basis supporting the adjudication.

Conclusion: The finding of clandestine removal was upheld and the demand of duty, interest and penalty was sustained in favour of the Revenue.

Ratio Decidendi: A delayed and unsupported retraction does not dislodge voluntarily recorded statements where the adjudicating authority has independent corroborative evidence of clandestine removal.

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