Clandestine removal requires corroborative evidence; private records and electricity use alone were insufficient to sustain excise demand.

Clandestine removal of central excise goods cannot be sustained on private note books, seized invoice books, stock shortage or electricity consumption figures alone. The Tribunal held that, without corroborative evidence of procurement of raw materials, actual manufacture, transport, clearance, buyers, or receipt of sale consideration, the department failed to prove the charge. As no independent evidence of clandestine manufacture and removal was brought on record, the demand and penalty were set aside in favour of the assessee.

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Issues: Whether the demand of central excise duty and penalty could be sustained on the basis of private note books, seized invoice books, stock shortage and electricity consumption without corroborative evidence of procurement, manufacture, clearance, transport or receipt of sale consideration.

Analysis: The demand rested primarily on private note books, invoice books and an inference drawn from electricity consumption. The Tribunal found that, despite the statements relied upon by the department, no further investigation established actual buyers, transporters, drivers, raw material suppliers or any flow back of consideration. No independent evidence of clandestine manufacture and removal was brought on record. Mere entries in private records and electricity consumption figures, without proof of raw material procurement, finished goods clearance and corroborating surrounding circumstances, were held insufficient to sustain the allegation.

Conclusion: The demand and penalty were not sustainable and the impugned order was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded because the allegation of clandestine removal was held unproved for want of corroborative evidence.

Ratio Decidendi: A charge of clandestine removal cannot be sustained merely on private records or electricity consumption figures unless supported by cogent and corroborative evidence showing manufacture, clearance, transport and receipt of consideration.

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