Clandestine removal demands need corroboration; retracted statements and incomplete linkage cannot justify full duty confirmation or asset confiscation.
Allegations of clandestine removal require coherent, corroborated evidence, and a retracted statement cannot sustain confirmation of the full demand where the quantities and counterparties are not fully linked. The Tribunal found that the department's material supported only part of the alleged clearances, with statements available for only some merchant manufacturers and the balance not independently corroborated, so the duty demand had to be re-quantified on the substantiated portion. Because the demand was substantially reduced and the confiscation of land, building, plant and machinery was only consequential, that confiscation was held unsustainable and set aside. The matter was remanded for fresh quantification of duty on proved clearances.
Issues: (i) whether the demand for alleged clandestine clearance could be confirmed for the full quantity and against all merchant manufacturers; (ii) whether the confiscation of land, building, plant and machinery was sustainable.
Issue (i): whether the demand for alleged clandestine clearance could be confirmed for the full quantity and against all merchant manufacturers.
Analysis: The statement of the partner had been retracted, and the earlier remand required reconsideration of that aspect. Even on the department's own material, the evidence supported only part of the alleged clearances. The Tribunal noted that statements were available only for some merchant manufacturers, while the remaining transactions were not independently corroborated. The quantity referred to in the retracted statement also did not fully match the quantity adopted for demand, and a separate amount said to have been recovered from some traders had to be adjusted while reworking the demand.
Conclusion: The full demand was not sustainable and was required to be re-quantified, with relief confined to the proved and corroborated portion.
Issue (ii): whether the confiscation of land, building, plant and machinery was sustainable.
Analysis: In view of the substantial reduction in the demand and the overall circumstances, the confiscation of the immovable and movable assets could not be justified as a consequential measure.
Conclusion: The confiscation was set aside.
Final Conclusion: The matter was sent back for fresh quantification of duty on the substantiated clearances, while the confiscation order was annulled.
Ratio Decidendi: Allegations of clandestine removal must be supported by coherent and corroborated evidence, and where the foundational statement is retracted and the quantities or parties are not adequately linked, the demand must be reworked rather than confirmed in full.
TaxTMI 
AI Drafter ✕
TaxTMI 
