Clandestine removal demands need independent corroboration; third-party records alone are insufficient without supporting evidence.

Allegations of clandestine removal cannot be sustained on third-party records alone unless independent corroborative evidence supports the disputed clearances. The Tribunal found that a de novo order had not complied with earlier remand directions requiring fresh examination on corroborative material, because the demand was confirmed again mainly on documents recovered from a third party. In the absence of independent investigation at the assessee's unit, evidence of raw material procurement, transport, money flow, or other supporting material, the demand was held unsustainable and the order was set aside in favour of the assessee.

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Issues: Whether a demand alleging clandestine removal could be sustained solely on the basis of third-party records and statements, without independent corroboration and without compliance with the earlier remand directions.

Analysis: The matter had been remanded earlier with a direction that the issue be examined afresh on the basis of corroborative evidence. In the de novo order, the demand was again confirmed substantially on the same third-party documents recovered from Monu Steels. The Tribunal held that the remand directions had not been complied with and that, in the absence of independent investigation at the assessee's unit, evidence of procurement of raw material, transportation, flow back of money, or other corroborative material, mere reliance on third-party records could not sustain allegations of clandestine removal. The reasoning was supported by earlier Tribunal decisions applying the same principle.

Conclusion: The demand could not be upheld and the impugned order was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded because the Revenue failed to establish clandestine removal through reliable corroborative evidence, and the confirmation based only on third-party records was unsustainable.

Ratio Decidendi: Allegations of clandestine removal cannot be sustained on third-party records alone unless they are supported by independent corroborative evidence establishing the disputed clearance.

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