Clandestine removal cannot rest on assumptions or an uncorroborated private register without independent proof.

Clandestine removal of non-knitted garments could not be established on assumptions about production capacity, cloth consumption, or the nature of clearances. The Department's reliance on an outward register maintained by security personnel, without corroboration from buyers, transporters, or technical and documentary evidence, was insufficient to prove suppression. The explanation that some entries related to returned goods, cancelled gate passes, samples, or repairs was not disproved by investigation. In the absence of independent verification, the private register could not by itself sustain the excise demand or consequential penalties.

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Issues: Whether the demand of central excise duty and consequential penalties could be sustained on the basis of an outward register and assumptions regarding the nature of the cleared garments, without corroborative investigation from buyers or transporters.

Analysis: The goods in question fell within the regime of levy applicable to non-knitted garments under headings 6201 and 6202 of the First Schedule to the Central Excise Tariff Act, 1985, and the dispute turned on whether the clearances were knitted or non-knitted. The recorded finding was that the adjudication rested on assumptions about production capacity and cloth consumption, without supporting technical material or documentary proof. The outward register relied upon by the Department was maintained by contractual security personnel, not by the assessee, and there was no investigation from buyers or transporters to verify the entries or to exclude the assessee's explanation that some entries related to returned goods, cancelled gate passes, samples, or repairs. In the absence of such corroboration, the private register could not by itself prove clandestine removal.

Conclusion: The demand and penalties were not sustainable, and the assessee succeeded.

Ratio Decidendi: A demand of clandestine removal cannot be upheld merely on assumptions or on an uncorroborated private register, and suspicion, however strong, cannot replace proof.

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