Clandestine removal demands need full corroboration; third-party records alone cannot sustain excise duty and penalties.

Allegations of clandestine removal of excisable goods failed because the demand rested mainly on third-party sales registers and records recovered from another premises, without independent corroboration. The supplier's and appellants' statements did not amount to admissions of purchase, payment, manufacture, or clearance, and no evidence completed the chain on raw materials, inputs, labour, power use, transport, financial flow, or finished-goods removal. A serious charge of clandestine removal cannot be sustained on isolated third-party documents alone. The duty demand and penalties were set aside, and the alternate exemption claim did not require separate adjudication.

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Issues: Whether the allegation of clandestine removal of excisable goods was proved by reliable evidence, and whether the appellants were entitled to consequential relief.

Analysis: The demand was founded primarily on entries in a third party sales register and related records found in another premises. The statements of the supplier and the appellants did not amount to an admission of purchase, payment, manufacture, or removal of the alleged goods. No corroborative material was produced to complete the evidentiary chain covering receipt of raw material, use of other inputs, labour or power consumption, manufacture, transport, financial flow, or clearance of finished goods. A serious allegation like clandestine removal cannot rest on isolated third-party records without supporting evidence, and prior conduct in other proceedings cannot by itself establish the present charge. Since the foundation of the demand was not independently proved, the alternate claim for exemption did not require separate adjudication.

Conclusion: The charge of clandestine removal was not sustained, and the duty demand and penalties were liable to be set aside in favour of the appellants.

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