Clandestine removal requires corroboration; register discrepancies alone cannot sustain duty demand, confiscation, or penalties.

Discrepancies between RG 1 register entries and private log books were held to create only suspicion of suppression, not proof of clandestine manufacture or removal. In the absence of corroborative evidence such as excess electricity consumption, excess raw material use, or identification of buyers for the alleged clearances, the department's case failed. The demand of duty under the Central Excise Act, 1944, along with confiscation and penalties under the Central Excise Rules, 1944, could not be sustained and was set aside in favour of the assessee.

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Issues: Whether the demand of duty and penalties could be sustained on the basis of discrepancies between RG 1 register entries and private log books, without corroborative evidence of clandestine production and removal.

Analysis: The discrepancies between statutory records and log books created a suspicion of suppression, but suspicion alone was held insufficient to establish clandestine manufacture or clearance. The absence of supporting material such as evidence of excess electricity consumption, excess use of raw materials, or identification of buyers for allegedly clandestinely removed goods was found fatal to the department's case. In the absence of corroboration, the order confirming duty under Section 11A of the Central Excise Act, 1944 and penalties under the Central Excise Rules, 1944 could not be upheld.

Conclusion: The issue was decided in favour of the assessee, and the duty demand, confiscation, and penalties were set aside.

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