Clandestine removal demands require corroborated evidence; untested statements and disputed private records cannot sustain duty liability.

A duty demand for alleged clandestine removal cannot rest on disputed private records and untested witness statements when cross-examination is allowed but the witnesses are not produced. The Monthly Dispatch Summary Details were repudiated by employee affidavits as forged, and no corroborative material supported the alleged clearances; the demand based on those records was therefore not sustainable. Parallel invoices and seized material also did not prove clandestine removal because the Department produced no independent evidence of raw material procurement, transport, buyers, sale proceeds, or manufacturing capacity. In the absence of positive corroboration, the related demand and penalties could not survive, and the impugned order was set aside.

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Issues: (i) Whether the demand based on the Monthly Dispatch Summary Details and the statements of witnesses could be sustained when cross-examination was allowed but the witnesses were not produced and the documents were alleged to be forged. (ii) Whether the allegation of clandestine removal supported by parallel invoices and other seized material stood proved in the absence of corroborative evidence.

Issue (i): Whether the demand based on the Monthly Dispatch Summary Details and the statements of witnesses could be sustained when cross-examination was allowed but the witnesses were not produced and the documents were alleged to be forged.

Analysis: The demand rested substantially on private records said to have been prepared by factory employees and on statements recorded during investigation. Cross-examination of the concerned witnesses had been permitted, but the Department failed to produce them. The affidavits filed by the employees repudiated the authenticity of the documents and asserted that they were forged. In the absence of tested evidence and with no corroborative material supporting the alleged clandestine clearances, the disputed records could not be treated as reliable proof.

Conclusion: The demand founded on the Monthly Dispatch Summary Details and the untested statements was not sustainable.

Issue (ii): Whether the allegation of clandestine removal supported by parallel invoices and other seized material stood proved in the absence of corroborative evidence.

Analysis: The allegation based on parallel invoices also depended mainly on the statement of a commission agent who was not produced for cross-examination. No independent evidence was brought on record showing procurement of raw material, transportation, sale proceeds, buyers, or manufacturing capacity sufficient to establish clandestine removal. In such a case, mere assumptions or presumptions could not displace the requirement of positive evidence.

Conclusion: The allegation of clandestine removal was not proved and the related demand and penalties could not survive.

Final Conclusion: The impugned order was set aside and all appeals were allowed, with consequential relief to follow in accordance with law.

Ratio Decidendi: A duty demand for clandestine removal must rest on reliable, corroborated evidence; untested witness statements and disputed private records cannot sustain the demand when cross-examination is denied or the witnesses are not produced.

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