Clandestine removal allegations require reliable evidence; inaccurate stock records and presumptive demands may not sustain confiscation or penalties.

Clandestine removal allegations in excise matters must rest on reliable evidence, consistent stock records, and concrete proof of duty evasion; presumptive demands based on inaccurate stock summaries or unsupported statements are vulnerable. The Tribunal also examined director liability, noting that responsibility for excise compliance cannot be assigned or excluded arbitrarily where the record does not support selective exoneration. Discrepancies in weights, input quantities, and computer-generated summaries can undermine confiscation and penalty proposals when they show lack of proper verification. Where explanations for movement of goods for job work are accepted and no duty demand survives, confiscation, penalties, and interest orders cannot be sustained.

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Issues: Whether the demand of duty, confiscation of goods, and penalties were sustainable on the basis of stock summaries, panchanamas, and recorded statements despite contrary material produced by the assessee.

Analysis: The demand was founded on allegedly unaccounted inputs and finished goods and on stock summaries prepared from disputed weight calculations. The Tribunal found the weight data in the departmental summaries unreliable, noted inconsistencies in the panchanamas, and accepted that the assessee had produced relevant contrary material, including buyer-wise data indicating that the alleged shortages were overstated. It further held that a panchanama is only a contemporaneous record and cannot, by itself, override more reliable evidence. In the absence of credible material showing actual clandestine removal, the foundation for duty demand failed. Once the duty demand did not survive, the confiscation, penalty, and interest orders also could not stand.

Conclusion: The demand, confiscation, penalties, and interest were unsustainable and were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded, and the impugned adjudication was annulled in full.

Ratio Decidendi: A duty demand based on disputed stock calculations and panchanama entries cannot be sustained without reliable corroborative evidence of clandestine removal; consequential confiscation, penalty, and interest must also fail when the foundation demand is not proved.

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