Clandestine removal proved by corroborative private records and admissions, sustaining duty demand, confiscation, and penalty.

Clandestine removal of excisable goods can be established through a chain of corroborative private records, transport documents, computer-generated reports, and admissions by responsible persons, even without mathematical precision. On that basis, the duty demand was upheld, subject to recomputation on a cum-duty price basis. The seized finished goods were treated as unaccounted stock and were liable to confiscation, with redemption fine sustained. The land, building, plant and machinery used in the clandestine activity were also held liable to confiscation, and the penalty linked to the quantified duty demand was restored.

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Issues: (i) Whether the private register and supporting documents established clandestine removal of excisable goods and justified the duty demand. (ii) Whether the seized goods were liable to confiscation and redemption fine. (iii) Whether the land, building, plant and machinery were liable to confiscation and consequential penalty was sustainable.

Issue (i): Whether the private register and supporting documents established clandestine removal of excisable goods and justified the duty demand.

Analysis: The demand was founded on entries in a private sales register, railway receipts, goods receipts, computer-generated disposal reports, and statements of the director, accounts officer, transport-related witnesses, and customers. The records were found to tally with one another, and the director's statement accepted that the register had been fabricated for bank purposes and that entries were made regarding sales, receipts, and parallel invoices. The Tribunal held that clandestine removal need not be proved with mathematical precision once the private records are shown to be authentic and are corroborated by surrounding evidence.

Conclusion: The demand of duty was upheld, subject to reworking the duty on a cum-duty price basis.

Issue (ii): Whether the seized goods were liable to confiscation and redemption fine.

Analysis: The show-cause notice specifically proposed confiscation of the seized finished goods, and the panchnama showed excess stock over the RG-1 records. The Tribunal rejected the view that no specific allegation existed and held that the goods were not accounted for and were therefore liable to confiscation under the penal provisions governing excisable goods.

Conclusion: The seized goods were held liable to confiscation, and redemption fine in lieu of confiscation was sustained.

Issue (iii): Whether the land, building, plant and machinery were liable to confiscation and consequential penalty was sustainable.

Analysis: The show-cause notice had proposed confiscation of the plant and machinery used in relation to clandestine manufacture and removal, and the Tribunal treated the large-scale duty evasion and use of the premises and machinery in the illegal activity as sufficient to attract the confiscatory provision. The Tribunal also upheld a penalty linked to the quantified duty demand.

Conclusion: The land, building, plant and machinery were held liable to confiscation, and penalty was imposed on the respondent company.

Final Conclusion: The order dropping the proceedings was reversed, the duty demand was sustained with a cum-duty recomputation, and the confiscation and penalty consequences were restored against the respondent company.

Ratio Decidendi: Clandestine removal may be established by a chain of corroborative private records, transport documents, computerized records, and admissions of responsible persons, and once the authenticity of such records is proved, duty demand and confiscatory consequences can follow.

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