Clandestine removal demands require independent corroboration; unverified parallel invoices and a retracted statement were insufficient to sustain duty and penalty.

A charge of clandestine removal under central excise law cannot be sustained on photocopies of parallel invoices and a retracted statement alone. Where searches yielded no incriminating documents, no stock discrepancy, and no independent corroboration such as raw material procurement, excess electricity use, transport records, delivery evidence, or payment trail, the duty demand and penalty fail. The Tribunal's appreciation of evidence was therefore upheld, and the Revenue's appeal remained dismissed.

---

---

Issues: Whether the Revenue could sustain the demand of duty and penalty on the basis of parallel invoices and statements when the alleged material was not corroborated by independent evidence and the statement relied upon was promptly retracted.

Analysis: The demand was founded on photocopies of parallel invoices and statements recorded during investigation. The searches at the factory, office and residential premises did not yield incriminating documents, there was no discrepancy in finished stock, and the department did not produce independent evidence such as proof of procurement of raw material, excessive electricity consumption, transport records, delivery to buyers, or payment trail. The statement relied upon by the department was retracted the very next day, and the record did not supply the corroboration necessary to support clandestine removal. The Tribunal's finding was therefore based on appreciation of evidence and did not disclose any substantial question of law.

Conclusion: The demand of duty and penalty could not be sustained, and the dismissal of the Revenue's appeal was justified.

Ratio Decidendi: A charge of clandestine removal under central excise law cannot be upheld merely on uncorroborated parallel invoices and a retracted statement; independent, unimpeachable evidence is required to sustain duty demand and penalty.

---