Clandestine removal demands reliable corroboration; private chart evidence and extrapolated electricity data were found insufficient.

Revenue must prove clandestine manufacture and removal with reliable, corroborated evidence; a private handwritten chart with inconsistencies, uncertain provenance, selective reliance on electricity-consumption data, and extrapolation from a small base over a much longer period were held insufficient. In the absence of direct proof of clandestine removals and adequate corroboration of higher production or electricity-based norms under Rule 173E, the proposed duty demand could not be sustained on a legally defensible basis.

---

---

Issues: Whether the Revenue had established clandestine manufacture and removal of excisable goods on the basis of a private chart, electricity consumption, and extrapolated production figures so as to justify the duty demand.

Analysis: The demand was founded mainly on a handwritten chart for a limited period and on electricity consumption data used to project production for a much longer period. The entries in the chart were found to contain serious inconsistencies, the status of the person who prepared or possessed the chart was not satisfactorily established, and the figures were selectively used without adequate explanation. The evidence did not provide direct proof of clandestine removals, and the projection of small-base data for years together was held to be unsustainable. The record also did not furnish sufficient corroboration on the alleged higher electricity usage or on the supporting production parameters needed for a reliable norm-based determination under Rule 173E.

Conclusion: The Revenue failed to prove clandestine manufacture and removal on a legally sustainable basis, and the duty demand could not be upheld.

---