Clandestine removal proved by corroborated records and missing stock registers, sustaining duty demand, penalties, and denial of SSI exemption.

Computer-generated challans, admissions, purchaser statements and the absence of raw material and finished stock registers together supported the inference of clandestine removal. The record showed that actual values were reflected in some challans, goods were received with or without bills, and payments were made by cash or cheque, while production could not be verified from statutory records. On that basis, the duty demand and penalties were upheld, and the claim to SSI exemption failed.

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Issues: Whether the duty demand and penalties were sustainable on the basis of computer-generated challans, statements, and the surrounding material, and whether the assessee was entitled to the SSI exemption.

Analysis: The sole foundation of the demand was the material generated from the computers, but the record also contained admissions that challans were generated showing the actual value, and a purchaser confirmed receipt of goods with or without bills and payment by cash or cheque. The assessee did not maintain registers for raw material or finished stock, so actual production could not be verified. On this material, the indication was that clearances were made by understating value in vouchers and, at times, without vouchers, thereby defeating the claimed SSI position.

Conclusion: The demand and penalties were upheld and the challenge to the finding of clandestine removal failed.

Final Conclusion: The appeals were rejected and the impugned order was sustained.

Ratio Decidendi: Where computer-generated records are corroborated by admissions, purchaser statements, and the absence of stock and raw material registers, a finding of clandestine removal and consequent duty liability can be sustained.

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