Clandestine removal requires corroborative evidence; private register entries alone were insufficient to sustain duty demand and penalty.

Private inward receipt register entries and discrepancies between dispatch documents and inward records were held insufficient, by themselves, to prove clandestine receipt and consumption of excess ingots for manufacture and clearance of CTD bars. In the absence of independent corroborative evidence showing actual receipt, use, or unrecorded removal of ingots, mere suspicion arising from private records could not replace legal proof. On that basis, the demand of duty and the penalty against the second appellant were set aside.

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Issues: Whether the demand of duty and penalty against the second appellant could be sustained on the basis of entries in the inward receipt register, without corroborative evidence of receipt and use of excess ingots in the manufacture and clandestine clearance of CTD bars.

Analysis: The entries in the private receipt register and the difference between the weight shown in dispatch documents and the inward register were held to be insufficient by themselves to establish clandestine receipt and consumption of ingots. The surrounding circumstances offered an explanation for the variations, and there was no independent corroboration showing that the ingots were actually used in the manufacture of CTD bars cleared without duty. Mere suspicion arising from private records was held not to substitute for legal evidence.

Conclusion: The demand of duty and the penalty against the second appellant were set aside.

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