Clandestine removal requires corroborative evidence; electricity consumption alone cannot sustain excise duty demand or penalties.

In a clandestine removal allegation, mere high electricity consumption and recovered invoices or vouchers were held insufficient without corroboration such as evidence of buyers, raw material procurement, transport, labour, or other proof of manufacture and clearance without duty payment. The explanation that electricity usage fluctuated because of furnace breakdowns and repeated restarting was accepted. The ruling reiterates that substantial corroborative evidence is required in clandestine removal cases and suspicion alone cannot sustain excise duty demand or penalties; the demand and penalties were therefore set aside in favour of the assessee.

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Issues: Whether the demand of central excise duty and penalties on the allegation of clandestine removal was sustainable on the basis of electricity consumption and recovered invoices and vouchers.

Analysis: The only material relied upon by the department was high electricity consumption and certain invoices or vouchers recovered during search. The record did not disclose corroboration in the form of evidence of buyers, raw material procurement, transport, labour, or other supporting material to establish manufacture and clearance of finished goods without payment of duty. The explanation regarding fluctuations and breakdown of electricity, requiring repeated restarting of the furnace, was accepted. In a charge of clandestine removal, substantial corroborative evidence is required, and suspicion alone is insufficient.

Conclusion: The allegation of clandestine removal was not proved, and the demand of duty and penalties was set aside in favour of the assessee.

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