Clandestine removal allegations fail where Revenue lacks tangible corroborative evidence of manufacture and duty evasion.

An allegation of clandestine manufacture and removal cannot be sustained on suspicion alone; Revenue must prove it with tangible corroborative evidence. Here, the record lacked indicators ordinarily associated with clandestine clearance, such as extra raw material purchases, finished-goods dispatches, excess electricity use, labour-related evidence, stock discrepancies, or other supporting material. Differences in model numbers between imported goods and trade invoices, and the absence of a trading reference in the tax audit report, were held insufficient to establish manufacture and duty evasion. The charge of clandestine manufacture and clearance was therefore not proved, and the demand could not be sustained.

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Issues: Whether the allegation of clandestine manufacture and removal of goods in the guise of trading activities was sustainable in the absence of tangible corroborative evidence.

Analysis: The demand was based on the premise that goods cleared under trade invoices were in fact manufactured goods removed without payment of duty. The record did not contain supporting evidence such as purchase of additional raw material, dispatch of finished goods, excess electricity consumption, labour-related indicators, stock discrepancies, or other corroborative material ordinarily necessary to establish clandestine clearance. Mere differences in model numbers between imported goods and goods shown in trade invoices, and the absence of a trading reference in the tax audit report, were held insufficient to prove manufacture and evasion. The allegation of clandestine removal being a serious charge, the burden remained on Revenue to establish it through tangible evidence, which was not done.

Conclusion: The charge of clandestine manufacture and clearance was not proved, and the demand could not be sustained.

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