Clandestine removal requires corroborative evidence; an uncorroborated confession and doubtful third-party records cannot sustain duty demand.

A charge of clandestine removal must be supported by reliable and corroborative evidence; an uncorroborated confession, inconsistent buyer statements, and doubtful third-party notebooks are insufficient to sustain the allegation. Here, the record lacked seizure, physical verification of misdescription, or independent corroboration such as electricity use, sale proceeds, or other surrounding evidence, and the notebooks were not shown to have been lawfully recovered. On those facts, the demand of central excise duty, penalty, and interest for alleged clearance of cheese yarn as hank yarn was held unsustainable.

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Issues: Whether the demand of central excise duty, penalty and interest could be sustained on the allegation that the appellant had cleared cheese yarn in the guise of hank yarn by clandestine removal.

Analysis: The evidence relied on by the revenue consisted mainly of witness statements, a confessional statement, and note books said to have been recovered from a third party. The statements of the alleged buyers were inconsistent on the nature of yarn received. The note books were not shown to have been legally recovered and, in any event, the entries referred to cones. The record did not show seizure of goods, physical verification establishing misdescription, or other independent corroboration such as electricity consumption, sale proceeds, or comparable surrounding evidence. The Tribunal held that a finding of clandestine removal cannot rest solely on an uncorroborated confession, particularly where the surrounding facts did not support the allegation and the revenue failed to produce concrete evidence.

Conclusion: The allegation of clearance of cheese yarn in the guise of hank yarn and the consequent demand, penalty and interest were held to be unsustainable, and the assessee succeeded.

Ratio Decidendi: A charge of clandestine removal must be proved by reliable and corroborative evidence, and cannot be sustained merely on an uncorroborated confession or doubtful third-party records.

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