Clandestine removal allegations cannot sustain confiscation or penalty without evidence of intent and a confirmed duty demand.

Confiscation of goods and imposition of penalty were found unsustainable where the only basis was alleged clandestine removal, but no material showed mala fide intent to remove the goods secretly. The goods were unrecorded in the factory, yet the revenue case rested on assumptions and presumptions rather than evidence of deliberate evasion. The absence of any confirmed duty demand, or any direction to clear the goods on payment of duty, further weakened the basis for coercive action. Confiscation and penalties were therefore not justified and were set aside.

---

---

Issues: Whether confiscation of goods and imposition of penalty were sustainable when the only basis was alleged clandestine removal, without evidence of mala fide intent or any confirmed duty demand.

Analysis: The goods were found unrecorded in the factory, but no material was produced to show that the omission was with an intention to remove the goods clandestinely. The revenue case rested on assumptions and presumptions. The absence of any confirmed duty demand, or any direction to clear the goods on payment of duty, also undermined the foundation for confiscation and penalty.

Conclusion: Confiscation and penalties were not justified and were set aside.

---