Clandestine removal may be proved by torn invoices and a credible statement, but double duty demand and partner penalty fail.

Torn invoices and the authorised signatory's statement were treated as sufficient evidence of clandestine removal where they described a practice of issuing invoices, clearing goods, taking invoices back, tearing them, and reissuing fresh invoices under the same number, and the attempted retraction was not accepted because it was not timely brought to the Department's notice. However, duty could not be demanded again on goods already cleared on payment of duty, so that portion of the demand was set aside. A separate penalty on the partner of the partnership concern was also held unsustainable and annulled.

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Issues: (i) Whether clandestine removal of goods was established on the basis of torn invoices and the recorded statement of the authorised signatory. (ii) Whether the demand on goods already cleared on payment of duty and the penalty on the partner were sustainable.

Issue (i): Whether clandestine removal of goods was established on the basis of torn invoices and the recorded statement of the authorised signatory.

Analysis: Torn invoices were recovered during investigation, and the statement of the authorised signatory described a practice of issuing invoices, clearing goods, receiving the invoices back from customers, tearing them, and issuing a fresh invoice for another consignment under the same number. The attempted retraction was not accepted, as the affidavit was not timely brought to the Department's notice. The evidence was treated as sufficient to prove clandestine removal.

Conclusion: The allegation of clandestine removal was sustained.

Issue (ii): Whether the demand on goods already cleared on payment of duty and the penalty on the partner were sustainable.

Analysis: The demand of Rs. 32,815 related to goods seized in the factory but already cleared on payment of duty during the relevant period, and was therefore treated as not recoverable again. The firm being a partnership concern, a separate penalty on the partner was held not to be maintainable.

Conclusion: The demand of Rs. 32,815 and the penalty on the partner were set aside.

Final Conclusion: The adjudication was sustained only to the extent of the confirmed duty, interest, and equivalent penalty relating to the clandestine removal, while the remaining demand and the partner's penalty were annulled.

Ratio Decidendi: Clandestine removal may be proved by recovered torn invoices read with a credible statement describing the removal modus operandi, but a duty demand cannot be raised twice on goods already duty-paid, and a separate penalty on a partner is not sustainable in the circumstances found.

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