Clandestine removal demands corroborative evidence; weighbridge slips, estimated shortages, and uncorroborated statements were insufficient here.

A charge of clandestine removal of sponge iron and coal must be established by tangible, corroborative evidence, not by weighbridge slips, estimated stock shortages, or an uncorroborated statement. Because the weighbridge was inside the factory premises, the slips did not by themselves show removal from the factory, and the shortages were only estimated. No supporting inquiry was made into excess production, extra raw material procurement, abnormal electricity use, transport movement, buyers, sale proceeds, or any money trail. The statement of the OSD was treated as a compliance declaration, not an admission. In the absence of clinching evidence, the demand of excise duty, interest, and penalty was not sustainable.

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Issues: Whether the demand of central excise duty, interest, and penalty for alleged clandestine removal of sponge iron and coal was sustainable on the basis of weighbridge slips, stock shortages, and the statement of the appellant's OSD.

Analysis: The allegation rested substantially on weighbridge slips, register entries, and estimated shortages found during search. Since the weighbridge was located inside the factory premises, the slips could not by themselves establish that goods had been cleared out of the factory clandestinely. The shortages were also based on estimation, and no supporting investigation was made regarding excess production, procurement of extra raw material, abnormal electricity consumption, transport movement, buyers, sale proceeds, or any money trail. The statement of the OSD was treated as a declaration of compliance with law and not as an admission of clandestine removal. In the absence of clinching corroborative evidence, the demand could not be sustained merely on presumptions.

Conclusion: The demand was not sustainable and the finding of clandestine removal was set aside in favour of the assessee.

Ratio Decidendi: A charge of clandestine removal must be proved by tangible and corroborative evidence, and cannot rest solely on weighbridge slips, estimated shortages, or uncorroborated statements.

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