Clandestine removal allegation fails when duty demand rests only on crown cork discrepancies without corroborating evidence.

A duty demand alleging clandestine removal of aerated water was found unsustainable where it was based only on a discrepancy between crown corks issued and RG-I records. The investigation failed to examine essential inputs and manufacturing variables, including bottles issued, bottles received back, and wastage during production. In the absence of independent evidence of clandestine manufacture or clearance, the allegation rested on assumption and presumption rather than corroborated facts. The impugned order was set aside, and the appeal was allowed with consequential relief.

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Issues: Whether the demand of duty alleging clandestine removal of aerated water, based only on the alleged discrepancy between crown corks issued and the quantity reflected in RG-I records, was sustainable.

Analysis: The allegation rested on the number of crown corks issued for production, while no corresponding investigation was made into the number of bottles issued, the number of bottles received back, or the extent of wastage during manufacture. Aerated water could not be cleared without bottles and crown corks, yet the investigation ignored an essential input and proceeded only on a formula-based inference. The record showed no independent evidence to establish clandestine manufacture or clearance, and the case was built on assumption and presumption rather than corroborated facts.

Conclusion: The demand of duty was not sustainable, and the allegation of clandestine removal failed.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

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