Clandestine removal allegations require positive evidence; a disputed private register alone cannot sustain excise duty, confiscation or penalty.

Central excise duty, confiscation, interest and penalty could not be sustained where the Revenue relied only on a disputed private register to allege clandestine removal. The appellate authority held that clandestine clearances must be proved by positive, reliable evidence and cannot rest on suspicion or conjecture; the register's authorship was not proved and its entries were not shown to be attributable to the assessee. On that factual basis, the demand failed, confiscation was unsustainable, and the assessee's eligibility for SSI exemption for the relevant period further supported the result.

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Issues: Whether the demand of central excise duty, confiscation of goods, interest and penalty could be sustained on the basis of a disputed private register and alleged clandestine removal.

Analysis: The Revenue did not produce any further evidence to establish clandestine clearances. The findings of clandestine removal must rest on positive and sufficient evidence and cannot be based on suspicion or conjecture. The private register recovered from the premises was itself disputed, its authorship was not proved, and the entries were not shown to be reliably attributable to the assessee. On that factual foundation, the appellate authority found that the departmental case was not proved beyond doubt and also held that the assessee was eligible for SSI exemption for the relevant period, making confiscation unsustainable.

Conclusion: The duty demand was not sustainable, and the connected confiscation, interest and penalty also failed.

Final Conclusion: The Revenue appeal was rejected after affirming that clandestine removal had not been established by reliable evidence.

Ratio Decidendi: Allegations of clandestine removal must be proved by positive evidence, and a disputed private register by itself is insufficient to sustain duty, confiscation, interest or penalty.

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