Clandestine removal allegations failed when shortage was not proved by reliable panchnama evidence and witness cross-examination.

Allegations of shortage of raw materials and clandestine removal failed where cross-examination of the panch witnesses showed that no physical weighment was conducted in their presence. On that evidence, the panchnama finding of shortage was not established, and the record did not provide reliable proof to sustain the demand or penalties. The impugned order was therefore held unsustainable, and the appeal succeeded with the demand and penalties set aside.

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Issues: Whether the alleged shortage of raw materials and clandestine removal were proved on the basis of the panchnama, statements, and cross-examination evidence, and whether the penalties could be sustained.

Analysis: The cross-examination of the panch witnesses showed that no physical weighment of the raw materials had been conducted in their presence. In view of that evidence, the finding in the panchnama regarding shortage of 8855.398 MT of raw materials was not established. The record therefore did not furnish reliable proof of clandestine removal or the factual foundation for confirmation of demand and penalties.

Conclusion: The allegation of shortage and clandestine removal was not proved, and the impugned order was unsustainable.

Final Conclusion: The appeals succeeded and the demand as well as the penalties were set aside.

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