Clandestine removal demands need independent corroboration; private records alone were insufficient to sustain duty and penalty.

Alleged clandestine removal of cement could not be sustained on private gate registers and loose sheets showing clinker consumption alone, because the documents were not properly proved and lacked seizure memo, panchnama, or reliable recovery evidence. The Department also failed to produce independent corroboration such as excess raw material purchases, abnormal electricity use, excess packing material, transport evidence, identified buyers, or proof of unaccounted sale proceeds. As the buyers denied off-invoice purchases and the burden in clandestine removal matters rests heavily on the Department, the duty demand and penalty were set aside.

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Issues: Whether the demand of duty and penalty for alleged clandestine removal of cement could be sustained on the basis of a gate register and loose sheets showing clinker consumption, without independent corroborative evidence.

Analysis: The documentary material relied upon by the Department was found insufficient to prove clandestine removal. The records were not supported by a seizure memo or panchnama, and their recovery from the factory was not properly established. More importantly, there was no corroboration in the form of excess purchase of raw materials, excess electricity consumption, excess packing material, transport evidence, identification of buyers, or proof of unaccounted consideration. The alleged buyers also denied any purchase outside proper invoices. In clandestine removal cases, the burden is heavy on the Department, and adverse findings cannot rest only on uncorroborated private records of doubtful authenticity.

Conclusion: The duty demand and penalty were not sustainable, and the assessee was entitled to relief.

Final Conclusion: The appeal failed because the Revenue did not establish clandestine manufacture and removal by cogent and corroborated evidence.

Ratio Decidendi: Alleged clandestine removal cannot be upheld on the basis of uncorroborated private documents alone; the Department must prove the charge with positive, independent evidence establishing manufacture, clearance, and receipt of sale proceeds.

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