Clandestine removal demands need corroborative evidence; private records alone could not sustain excise duty or penalties.

Private handwritten records alone were insufficient to sustain a central excise demand for alleged clandestine manufacture and removal where they related to job-work transactions, reflected receipt and consumption of material, scrap and charges, and were supported by statutory records and export evidence. The department failed to produce corroborative evidence such as excess raw material procurement, increased electricity use, proof of manufacture of the alleged final product, or other independent material linking the records to removals. The allegation of clandestine clearance was therefore not substantiated, and the duty demand with consequential penalties was held unsustainable.

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Issues: Whether the demand of central excise duty and consequential penalties could be sustained on the basis of private records alone, without corroborative evidence of clandestine manufacture and removal.

Analysis: The private handwritten records were found to relate to job-work transactions and reflected material received, consumption, scrap generation and job-work charges. The record also showed that the appellants had maintained statutory records and had produced evidence of exports with supporting documents and remittances. The department did not adduce corroborative material such as excess procurement of raw material, increased electricity consumption, proof of manufacture of the alleged final product, or other independent evidence to establish clandestine clearance. In the absence of proper co-relation between the private records and the alleged removals, the allegation of clandestine removal was not substantiated.

Conclusion: The duty demand was not sustainable, and the consequential penalties also failed.

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