Clandestine removal requires positive corroborative evidence; incomplete records and presumptions cannot sustain duty, penalty or interest.

A charge of clandestine removal must be supported by positive, independent and corroborative evidence proving clandestine manufacture, clearance and related monetary flow. Where the Revenue relies mainly on recovered records, test certificates, loading advice, input-output ratio and a statement, but produces no corroboration from transporters, buyers, raw material procurement or the buyers' end, the allegation remains unproved. On that evidentiary footing, the duty demand fails, and the connected penalty and interest cannot survive.

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Issues: Whether the demand of duty and penalty could be sustained on allegations of clandestine removal when the Revenue relied mainly on recovered records, test certificates, loading advice, input-output ratio and a statement, but failed to produce independent corroborative evidence of procurement, manufacture, clearances, buyers or monetary flow.

Analysis: The demand rested on documents recovered from the factory, input-output ratio and an inculpatory statement, but the record did not show further investigation at the level of transporters, purchasers, raw material procurement, actual manufacture, or the buyers' end. Clandestine removal is a positive charge and must be proved by tangible, affirmative and corroborative evidence, not by assumption, presumption or doubt. The Commissioner (Appeals) had therefore correctly found that the allegation was unsupported by the essential evidentiary foundation and that, once the duty demand failed, the connected penalty and interest consequences also could not survive.

Conclusion: The allegation of clandestine removal was not proved and the order dropping the demand, penalty and interest was ly upheld; the Revenue's appeal failed.

Ratio Decidendi: A charge of clandestine removal can be sustained only on the basis of positive, independent and corroborative evidence establishing the clandestine manufacture and removal, and not on mere suspicion, presumption or incomplete material.

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