Clandestine removal demands need independent corroboration; a lone statement without supporting records cannot sustain duty or penalties.

Central excise duty demands for alleged clandestine removal require cogent and tangible evidence, and the Department must prove manufacture and clearance by independent corroboration. Here, the demand rested mainly on the director's statement, with no supporting material such as raw-material consumption, electricity records, transport documents, sale proceeds, or other contemporaneous evidence. The stated quantity also did not tally with the quantity adopted in the demand, weakening the allegation further. A statement said to have been obtained under coercion or undue influence, by itself, was held insufficient to sustain clandestine clearance allegations, so the duty demand and related penalties were not sustainable.

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Issues: Whether the demand of central excise duty and the penalties for alleged clandestine clearance could be sustained when the case rested principally on recorded statements without independent corroborative evidence.

Analysis: The only substantial basis for the demand was the statement of the director and there was no independent material establishing clandestine manufacture or removal. The stated quantity also did not match the quantity confirmed in the demand, and the alleged clearance was not supported by evidence such as raw-material consumption, electricity use, transport documents, sale proceeds, or other contemporaneous records. In such matters, the burden lies on the Department to prove clandestine removal with cogent and tangible evidence, and a mere statement, particularly one alleged to have been obtained under coercion or undue influence, is insufficient.

Conclusion: The duty demand was not sustainable and the penalties could not survive.

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