Clandestine removal requires positive corroborative evidence; unverified third-party records cannot sustain duty, confiscation or penalties.

Clandestine manufacture and removal of excisable goods must be proved by positive, corroborative evidence linking the alleged clearances to the assessee. Statements, loose papers and materials recovered from associated concerns, without reliable linkage to removals from the appellant's premises, were held insufficient; suspicion and unverified third-party records could not substitute for proof. The charge therefore failed, and the duty demand, confiscation of seized goods and penalties were not sustainable.

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Issues: Whether the Revenue proved clandestine manufacture and removal of excisable goods so as to sustain demand of duty, confiscation and penalties.

Analysis: The finding against the appellants rested largely on statements, loose papers and materials recovered from the premises of associated concerns. The record also showed searches at the premises of the associated units revealing machinery, semi-finished goods, assembly work and activities consistent with manufacturing operations there. The evidence relied upon by the Revenue was not sufficiently corroborated by positive proof linking the clearances to the appellants' premises, and suspicion could not substitute for evidence. The material seized from third-party premises, without reliable linkage to actual clandestine removals by the appellants, was insufficient to sustain the charge.

Conclusion: The charge of clandestine manufacture and removal was not proved. The demand of duty, confiscation of seized goods and penalties were not sustainable and the decision was in favour of the assessee.

Ratio Decidendi: A charge of clandestine removal must be established by positive, corroborative evidence, and cannot rest on assumptions, presumptions or unverified third-party records.

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