Clandestine removal allegations require independent corroboration; income tax search material alone was insufficient to sustain excise demand.

Central excise duty demand alleging clandestine removal could not be sustained where it rested only on income tax search material and minor accounting discrepancies. The materials in question were subsequently entered in the excise records, the discrepancy was negligible against the overall volume handled, and no independent evidence established manufacture, removal, transport, procurement, buyers, or any other tangible link. Mere reliance on search findings, without corroboration, was insufficient to prove clandestine activity, so the demand failed and relief followed.

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Issues: Whether central excise duty demand alleging clandestine removal could be sustained solely on the basis of income tax search material and accounting differences, in the absence of independent corroborative evidence.

Analysis: The demand was founded on income tax search findings suggesting unaccounted raw material and scrap, but the material was subsequently entered in the excise records. The discrepancy was negligible in relation to the overall volume of materials handled. No independent investigation established clandestine manufacture, removal, transport, procurement, buyers, or any other tangible link supporting the allegation. Mere reliance on income tax search results, without corroboration, was held insufficient to confirm excise demand.

Conclusion: The allegation of clandestine removal was not established, and the excise demand could not be sustained. The appeals were allowed with consequential relief.

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