Clandestine removal requires independent positive evidence; uncorroborated paper slips and a retracted statement are insufficient.

Clandestine removal cannot be established merely from paper slips and a retracted statement where the record lacks independent corroboration. The alleged manufacture and clearance were not supported by buyer verification, further investigation, or other positive evidence, so the evidentiary basis was found insufficient. On that footing, the allegation of clandestine removal failed and the order dropping the proceedings was upheld.

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Issues: Whether clandestine removal of goods was proved on the basis of paper slips and a subsequently retracted statement, and whether the Revenue could succeed without corroborative evidence.

Analysis: The demand was founded primarily on paper slips and the Director's statement recorded during the search. The statement was later retracted, and the record did not contain independent corroboration from further investigation, buyer-side verification, or other positive evidence establishing manufacture and clandestine clearance. The finding below that clandestine removal must be supported by corroborative material was accepted, and the evidence relied upon was held insufficient to sustain the allegation.

Conclusion: Clandestine removal was not proved, and the Revenue's challenge failed.

Final Conclusion: The order dropping the proceedings was upheld and the Revenue's appeal was rejected.

Ratio Decidendi: An allegation of clandestine removal cannot be sustained solely on a retracted statement and uncorroborated paper slips; it requires independent positive evidence.

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