Clandestine removal requires corroborative evidence; a mere mismatch between financial and excise records is insufficient to sustain duty demands.

A charge of clandestine removal cannot be sustained merely because balance sheet figures differ from Central Excise records. The discrepancy may raise suspicion, but the Revenue must prove suppression or unaccounted clearance with affirmative, corroborative evidence such as purchaser identification, investigation, or other independent material. Where the assessee offers an explanation that excise records reflect actual production and removals, and that explanation is not disproved by supporting evidence, duty, penalty and interest are not recoverable. The absence of corroborative investigation was fatal, and the demand failed.

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Issues: Whether the demand of duty, penalty and interest was sustainable on the basis of discrepancy between the balance sheet figures and the Central Excise records, in the absence of corroborative evidence of clandestine removal.

Analysis: The discrepancy in accounts by itself raised suspicion, but the explanation that commercial invoices were issued in advance and that the excise records reflected actual production and removals was not disproved by independent evidence. In a case alleging clandestine removal of a large quantity of tyres, the burden lay on the Revenue to establish the charge by affirmative and corroborative material. No investigation was undertaken to identify purchasers or to collect other supporting evidence. Mere variation between financial statements and excise records was held insufficient to sustain the allegation.

Conclusion: The demand of duty, penalty and interest was not sustainable, and the appeal was allowed in favour of the assessee.

Ratio Decidendi: A charge of clandestine removal cannot be upheld merely on the basis of discrepancy between balance sheet figures and excise records unless supported by independent corroborative evidence discharging the Revenue's burden of proof.

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