Clandestine removal claim failed where retracted statements and weak corroboration did not prove actual manufacture or clearance.

Clandestine removal and the related duty demand were not established where the case depended mainly on investigative statements and a theoretical calculation based on an alleged shortage of perfume. Several statements were retracted, transporters denied moving any clandestinely removed goods, and the department failed to prove procurement of the other principal raw materials or actual manufacture of the alleged quantity of Gutkha. In the absence of cogent positive evidence supporting the essential indicia of clandestine clearance, the allegation could not stand and the duty demand was held unsustainable.

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Issues: Whether clandestine removal and consequent duty demand were proved on the basis of statements, alleged shortage of one raw material, and other surrounding circumstances.

Analysis: The demand rested mainly on statements recorded during investigation and on a theoretical calculation from the alleged shortage of perfume. Several statements had been retracted, the transporters denied transporting any clandestinely removed goods, and the department did not establish procurement of the other principal raw materials or the actual manufacture of the alleged quantity of Gutkha. The essential indicia for proving clandestine removal were not supported by cogent positive evidence.

Conclusion: The allegation of clandestine removal was not proved and the duty demand was unsustainable.

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