Duty demand on alleged excess EOU clearances fails where quantification and supporting evidence are not proved.

A duty demand raised on alleged excess clearance of surplus raw material by an EOU on debonding was held unsustainable because the revenue did not disclose or prove the basis of quantification. Customs permissions did not prescribe any quantity or value limit, yet the demand relied on an asserted excess clearance figure and short payment without a supporting chart, document, or evidence showing how those figures were derived. In the absence of corroborative material establishing excess clearance or non-payment of duty, the demand could not stand, and the consequential interest and penalty were also set aside.

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Issues: Whether the demand of duty, interest and penalty arising from alleged excess clearance of surplus raw material from an EOU on debonding was sustainable when the basis of computation and supporting documents were not disclosed or proved.

Analysis: The clearance permissions issued by the customs authorities did not fix any quantity or value limit, yet the demand proceeded on an alleged excess clearance figure and an alleged short payment. The record showed no material explaining how the figures were arrived at, no chart or supporting document evidencing excess clearance, and no proof that duty had not been paid on the clearances. A demand founded merely on an audit objection, without a demonstrated basis for quantification and without corroborative evidence, could not be sustained.

Conclusion: The duty demand was unsustainable and was set aside, along with the consequential interest and penalty.

Final Conclusion: The appeal succeeded and the assessee obtained consequential relief against the confirmed demand.

Ratio Decidendi: A duty demand, interest and penalty cannot be sustained where the revenue fails to establish, with supporting material, both the alleged excess clearance and the basis of quantification.

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