Clandestine removal demands need reliable corroboration; unverified invoices and statements were insufficient to sustain duty and penalties.

Clandestine removal of excisable goods was not proved because the Revenue's evidence lacked reliable corroboration. Parallel invoices were not recovered from the respondent, and their alleged third-party origin was unverified because no supporting panchnama or source verification was produced. The recorded statements were not specific or categorical, alleged retractions could not be ignored, and the job-work challans were not supported by independent enquiry at the job workers' end. A part-payment during investigation was not treated as an admission of clandestine removal. The duty demand and penalties were therefore set aside, and the Revenue's challenge failed.

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Issues: Whether the charge of clandestine removal of excisable goods was sustainable on the basis of parallel invoices, job-work challans, recorded statements and a part-payment made during investigation.

Analysis: The evidentiary material was examined as a whole and found insufficient to sustain the demand. The parallel invoices were not recovered from the respondent's and their recovery from a third party remained uncorroborated, with no supporting panchnama or verification of the alleged source of those documents. The statements relied upon were not specific or categorical, and the alleged retractions could not be ignored in the circumstances. The job-work challans and other statements also lacked independent corroboration, and no enquiry was carried out at the job workers' end. A mere deposit during investigation did not amount to an admission of clandestine removal. The handwriting expert's opinion was also found to have been supported by reasons and could not be discarded lightly.

Conclusion: The charge of clandestine removal was not proved, and the Revenue's challenge to the order setting aside the duty demand and penalties failed.

Final Conclusion: The appeal was rejected and the relief granted by the lower appellate authority in favour of the respondent was maintained.

Ratio Decidendi: Allegations of clandestine removal must be established by reliable, specific and corroborated evidence, and uncorroborated third-party documents or unverified statements are insufficient to sustain duty demand and penalty.

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