Clandestine removal allegations need independent corroboration; rough register entries and unverified statements alone are insufficient.

Allegations of clandestine manufacture and removal of excisable goods require independent, reliable corroboration and cannot be sustained merely on rough register entries or uncorroborated statements recorded during investigation. A register said to reflect packing, repacking, weighing and re-weighing, without a consistent pattern of suppressed production, was insufficient by itself. In the absence of supporting evidence such as raw material discrepancy, abnormal electricity use, stock variations, fund flow or buyer records, the demand and penalties were not sustainable. Statements under Section 108 of the Customs Act, 1962 were treated as needing corroboration before they could support such serious allegations.

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Issues: Whether clandestine removal of excisable goods was established on the basis of entries in a rough register and statements recorded during investigation.

Analysis: The demand rested on a rough register recovered from the factory and on statements of persons recorded during investigation. The register was said to be maintained for packing, repacking, weighing and re-weighing activities, and the record did not show a consistent pattern of suppressed production. The statements relied upon were not supported by independent evidence and, in the absence of corroboration, could not by themselves prove clandestine manufacture and removal. The material normally expected in such cases, such as evidence of raw material procurement, excess consumption of electricity, shortages or excesses in statutory records, flow back of funds, or buyers' records, was not brought on record. Statements recorded under Section 108 of the Customs Act, 1962 were treated as requiring corroboration before they could sustain such serious allegations.

Conclusion: Clandestine removal was not proved, and the demand and penalties could not be sustained.

Final Conclusion: In the absence of concrete corroborative evidence, the impugned orders were set aside and the assessee succeeded.

Ratio Decidendi: Allegations of clandestine manufacture and removal, being quasi-criminal in nature, cannot be sustained merely on rough register entries or uncorroborated statements and must be proved by independent, reliable evidence.

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