Clandestine removal demands require corroborative evidence; retracted statements and disputed electronic records were insufficient here.

Clandestine manufacture and clearance of cigarettes was not proved where the Revenue relied mainly on retracted statements, disputed laptop printouts, transport documents, and efficiency reports. The electronic records were not shown to meet admissibility requirements, and the transport documents did not conclusively identify the goods as cigarettes. With no independent corroboration of raw-material procurement, actual buyers, sale proceeds, or unaccounted stock, the heavy burden to prove clandestine removal was not discharged. The duty demand and consequential penalties were therefore unsustainable, and the Revenue's appeal failed.

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Issues: Whether the Revenue had established clandestine manufacture and clearance of cigarettes so as to sustain the demand of central excise duty and consequential penalties.

Analysis: The evidence relied upon consisted mainly of statements recorded from witnesses, computer printouts from a laptop, transport documents, and efficiency reports. The statements substantially stood retracted, and the computer printouts were not shown to satisfy the admissibility requirements for electronic records. The transport documents did not conclusively identify the goods as cigarettes, and the departmental case lacked independent corroboration of procurement of raw materials, actual buyers, receipt of sale proceeds, or unaccounted stock. In a unit under physical control, the burden on the Revenue to prove clandestine manufacture and removal was heavy, and that burden was not discharged on the basis of surmises or preponderance of probability alone.

Conclusion: The allegation of clandestine removal was not proved, the duty demand and penalties were unsustainable, and the Revenue's appeal failed.

Ratio Decidendi: A demand for clandestine removal must be supported by tangible, corroborative evidence establishing manufacture, clearance, and duty evasion, and cannot rest merely on retracted statements, disputed electronic records, or inferential transport entries.

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