Clandestine removal needs corroborative evidence; quotations and procedural lapses alone cannot sustain excise duty on exports.

Quotations alone did not establish clandestine removal, because there was no corroborative evidence such as transport records or buyer statements; the duty demand on that basis was set aside. Admitted exports supported by Form-H could not be subjected to duty merely for procedural non-compliance, so that demand and the related penalty were also set aside. The matter was remanded for fresh adjudication and re-quantification after excluding the unsustainable components, while the admitted demand relating to Jangad remained undisturbed.

---

---

Issues: (i) Whether the demand of duty based on quotations and alleged clandestine removal was sustainable. (ii) Whether duty could be confirmed on admitted exports merely for non-compliance with procedure, and whether penalty could survive.

Issue (i): Whether the demand of duty based on quotations and alleged clandestine removal was sustainable.

Analysis: The documents relied upon were found to be quotations only and did not actual clearance of goods. No supporting evidence such as transportation particulars or buyer statements was brought on record to establish clandestine removal. The assessee also did not accept the quotation entries as evidence of clearance.

Conclusion: The demand based on quotations was not sustainable and was set aside in favour of the assessee.

Issue (ii): Whether duty could be confirmed on admitted exports merely for non-compliance with procedure, and whether penalty could survive.

Analysis: The goods were admittedly exported, and Form-H was produced as proof of export. A procedural lapse, without dispute regarding actual export, was held insufficient to sustain the duty demand. In view of the relief granted on the substantive issues, penalty was also found not imposable.

Conclusion: The duty demand on export clearances was not sustainable on the ground of procedural lapse, and the penalty was set aside.

Final Conclusion: The matter was remanded for fresh adjudication and re-quantification of duty after excluding the unsustainable components, while the admitted demand relating to Jangad remained undisturbed.

Ratio Decidendi: Mere quotations and procedural irregularities in an admitted export do not, by themselves, establish clandestine removal or justify excise duty demand in the absence of corroborative evidence.

---