Clandestine removal demands fail without corroborative evidence, as loose slips and statements alone were insufficient to prove evasion.

CESTAT held that a demand of central excise duty and equal penalty for alleged clandestine manufacture and removal of M.S. ingots could not be sustained on the basis of loose slips and statements alone. In the absence of corroborative evidence such as excess raw material procurement, discovery of unaccounted finished goods, identified buyers, proof of transport, or receipt of sale proceeds, the charge remained unproved. Applying the settled principle that clandestine activity must be established by tangible and corroborative evidence, the Tribunal set aside the demand and penalties in favour of the assessee.

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Issues: Whether the demand of central excise duty and equal penalty for alleged clandestine manufacture and removal of M.S. ingots could be sustained on the basis of loose slips and statements, in the absence of corroborative evidence.

Analysis: The proceedings rested essentially on 23 loose slips recovered from a third party and on statements said to connect the appellant with the alleged clearances. The record did not show evidence of excess raw material procurement, actual removal of unaccounted finished goods, discovery of such goods outside the factory, identified buyers, receipt of sale proceeds, or proof of transport of the alleged clandestine clearances. The Tribunal applied the settled principle that clandestine manufacture and removal must be established by tangible and corroborative evidence and not by mere inference or assumption.

Conclusion: The demand and penalties were not sustainable, and the impugned order was set aside in favour of the assessee.

Ratio Decidendi: A charge of clandestine manufacture and removal cannot be upheld unless supported by tangible, corroborative evidence establishing the entire chain of procurement, production, clearance, buyers, transport, and sale proceeds.

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