Independent reconsideration on remand is mandatory; relying on set-aside findings made the clandestine removal demand unsustainable.

A remand requiring independent reconsideration of a factual issue obliges the adjudicating authority to record a fresh finding on that issue and not to rely on findings from an earlier order already set aside. Here, the remand specifically required a fresh examination of power consumption, which was central to the clandestine removal allegation, but the authority instead adopted the earlier set of findings without independent reappraisal. In those circumstances, no adverse finding could validly be sustained against the assessee, and selective confirmation of demand was also found unsustainable. The demand and penalties were therefore not maintainable, and the Revenue's appeals failed.

---

---

Issues: Whether the demand of duty and penalties based on allegations of clandestine removal could be sustained when the adjudicating authority, after remand, failed to independently examine the issue of power consumption as specifically directed.

Analysis: The remand required a fresh finding on the power-consumption aspect, which was described as the backbone of the department's case. The adjudicating authority, however, relied on findings from the earlier order that had already been set aside, instead of independently reappraising the material after remand. In those circumstances, no adverse finding could validly be drawn against the assessee on the remanded issue. The remaining evidence had already been considered by the appellate authority, and the Tribunal also accepted that similarly placed cases had been dealt with differently, making selective confirmation of demand unsustainable.

Conclusion: The demand and penalties could not be sustained against the assessee.

Final Conclusion: The Revenue's appeals failed and the order dropping the demand was maintained.

Ratio Decidendi: When a matter is remanded for independent reconsideration of a factual issue, the adjudicating authority must render a fresh finding on that issue and cannot rely on findings from an earlier order that has been set aside; failure to do so renders the resultant adverse demand unsustainable.

---