Clandestine removal cannot rest on rough private entries alone without corroboration of manufacture, procurement, and actual clearance.

Rough handwritten entries recovered from residential premises were held insufficient to sustain a demand or penalty for alleged clandestine removal. The records lacked adequate product particulars, and the Revenue produced no independent evidence of excess raw material procurement, manufacture of final products, or actual clearance to identified buyers. The alleged author also disputed the handwriting. In the absence of corroboration, private rough notes could not by themselves prove clandestine manufacture and clearance, so the allegation failed and the impugned order was set aside.

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Issues: Whether demand and penalty could be sustained on the basis of rough handwritten entries recovered from the residential premises, and whether such entries by themselves proved clandestine manufacture and clearance of goods.

Analysis: The Revenue's case rested essentially on rough entries in two sheets/registers said to record dates of supply, challans and value of goods. The records did not contain sufficient product particulars, and there was no independent evidence of excess procurement of raw material, manufacture of final products, or actual clearance to identified buyers. The alleged author also disputed the handwriting. In the absence of corroborative material, private rough entries found from a residence were insufficient to establish clandestine activity.

Conclusion: The allegation of clandestine removal was not proved, and the demand and penalties could not be sustained.

Final Conclusion: The impugned order was set aside and the appeals were allowed.

Ratio Decidendi: Clandestine removal cannot be established solely from uncorroborated rough entries or private records; independent evidence of manufacture, procurement and actual clearance is required.

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