Clandestine removal demands require independent corroborative evidence; third-party documents and unverified statements alone are insufficient.

A demand for central excise duty based only on private records recovered from third-party premises was not sustainable where no independent evidence showed clandestine manufacture, excess production, unaccounted raw materials, identified buyers, transport details, or receipt of sale proceeds. The statements relied on were not sufficiently corroborated through cross-examination or other tangible proof. In the absence of clinching and corroborative evidence, third-party documents alone were treated as inadequate to establish clandestine removal, and the duty demand with connected penalties was set aside.

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Issues: Whether a demand of central excise duty and consequential penalties could be sustained solely on the basis of documents recovered from third-party premises without corroborative evidence of clandestine manufacture, removal, transportation, and sale.

Analysis: The demand rested principally on private records seized from the premises of third parties and statements recorded during investigation. No corroborative material was brought from the appellant's manufacturing premises to show excess production, unaccounted procurement of raw materials, clandestine clearance, identified buyers, transport particulars, or realization of sale proceeds. The statements relied upon were not independently established by cross-examination in a manner sufficient to support the allegation. In the absence of clinching and tangible evidence, third-party records by themselves were not treated as adequate proof of clandestine removal.

Conclusion: The demand of duty and the connected penalties could not be sustained and were set aside, in favour of the assessee.

Final Conclusion: Allegations of clandestine removal must be proved by reliable and corroborative evidence, and liability cannot rest only on third-party documents and uncorroborated statements.

Ratio Decidendi: A charge of clandestine manufacture and removal cannot be upheld on the basis of third-party records alone unless supported by independent, tangible, and corroborative evidence establishing the unaccounted production and clearance.

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