Clandestine removal demands require independent corroborative evidence; matched invoices and records can defeat demands based on slips.

Matched kachha parchis and invoices, supported by RG-1 entries and ledger records, were treated as evidence of duty-paid clearances, so the demand linked to those slips was not sustained. For the remaining slips, the text states that a charge of clandestine removal cannot rest only on inculpatory statements under section 14; it requires independent, tangible and corroborative evidence such as buyer, transporter or investigative verification. In the absence of such support, the demand and connected penalties were set aside.

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Issues: (i) Whether the duty demand relatable to the 25 kachha parchis, which were matched with invoices and records, was liable to be sustained; (ii) Whether the duty demand and penalties based on the seven remaining kachha parchis could be upheld on the basis of inculpatory statements without corroborative evidence.

Issue (i): Whether the duty demand relatable to the 25 kachha parchis, which were matched with invoices and records, was liable to be sustained.

Analysis: The adjudicating authority had examined each of the 25 slips with the corresponding invoices and found matching particulars such as quantity, size, truck number and consignee details. The invoices were also reflected in the RG-1 register and ledger account. On that basis, the clearances covered by those slips were treated as duty paid. No material was shown to displace those findings.

Conclusion: The dropping of the demand relating to the 25 kachha parchis was upheld and the Revenue's challenge on this part failed.

Issue (ii): Whether the duty demand and penalties based on the seven remaining kachha parchis could be upheld on the basis of inculpatory statements without corroborative evidence.

Analysis: Clandestine removal is a serious allegation and must be established by tangible and corroborative evidence. The record showed no verification with buyers or transporters and no independent investigation proving manufacture and removal of unaccounted goods. The inculpatory statements of the concerned officers did not specifically cover the seven slips. In the absence of supporting evidence, the demand could not rest only on statements recorded under section 14.

Conclusion: The demand based on the seven kachha parchis and the connected penalties were set aside.

Final Conclusion: The assessee succeeded in the appeal, the Revenue's appeal was dismissed, and the entire surviving duty demand with penalties was annulled.

Ratio Decidendi: A charge of clandestine removal cannot be sustained merely on inculpatory statements and must be proved by independent tangible and corroborative evidence.

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