Clandestine removal demand fails without direct evidence; documentary reconciliation required, and the matter was remanded for fresh adjudication.

A demand alleging clandestine removal based only on discrepancies between ER-1 returns and balance-sheet figures was not sustainable on the existing record where there was no direct evidence of transport, buyers, or receipt of consideration. The appellant's balance-sheet entries, ledgers, and chartered accountant's certificate were said to explain the difference as advance or forward sales, but those documents were not properly verified. The impugned order was set aside and the matter remanded for fresh de novo adjudication after reconsideration of the documentary reconciliation.

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Issues: Whether the demand alleging clandestine removal on the basis of discrepancy between ER-1 returns and balance-sheet figures could be sustained, and whether the matter required remand for fresh verification of the appellant's documentary explanation.

Analysis: The record disclosed no direct evidence of clandestine removal such as transportation details, identification of buyers, or proof of consideration. The appellant relied on balance-sheet entries, ledger accounts, and a chartered accountant's certificate to explain the discrepancy as arising from advance or forward sales. The Adjudicating Authority had not properly verified these documents or the reconciliation offered by the appellant.

Conclusion: The demand could not be finally affirmed on the existing material, and the matter was required to be reconsidered on the basis of the documents produced by the appellant. The impugned order was set aside and the appeal was allowed by remand for fresh de novo adjudication.

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