Clandestine removal requires corroborative evidence; packing slips and statutory records alone were insufficient to sustain duty demand and penalty.

Clandestine removal allegations based only on packing slips and RG 1 comparisons failed because the record lacked independent corroboration. The absence of investigation into raw material consumption, electricity usage, and identified buyers meant the charge rested on presumptions rather than proved facts. Private records alone were held insufficient to establish evasion without supporting evidence of clandestine manufacture and removal. On that basis, the demand, penalty and confiscation could not be sustained, and the order was set aside in favour of the assessee.

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Issues: Whether the demand of duty, penalty and confiscation could be sustained on the basis of packing slips and statutory records alone without corroborative evidence of clandestine manufacture and removal.

Analysis: The entire case of suppression rested on packing slips and comparisons with RG 1 entries. The record showed no meaningful investigation into raw material consumption, electricity consumption, or identification of buyers to whom the alleged unaccounted goods were sold. In clandestine removal matters, private records by themselves do not conclusively establish evasion unless supported by independent corroboration. The adjudication was therefore founded on presumptions and assumptions rather than proved facts.

Conclusion: The demand and consequential penalty could not be sustained. The finding of clandestine manufacture and removal failed for want of corroborative evidence and the order was set aside in favour of the assessee.

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