Burden of proof in clandestine removal allegations failed where notice was vague and evidence did not support the penalty.

Vague and self-contradictory allegations in a show cause notice, without a clear correlation between the disputed goods and the supporting documents, were insufficient to prove clandestine removal or a breach of Rule 173H. The department failed to discharge the burden of showing that the goods were cleared without duty or proper gate passes, and the appellant's explanation, supported by gate passes and challans, remained plausible on the record. As the evidence did not establish intent to evade duty or justify the penalty, the demand-based penalty could not be sustained.

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Issues: Whether the show cause notice and the Collector's findings were vague and whether the charges of clandestine removal and violation of Rule 173H were proved so as to justify the penalty.

Analysis: The notice contained self-contradictory particulars in respect of the quantities in dispute and did not clearly identify the basis on which the goods were alleged to have been cleared without duty or without proper gate passes. The appellant produced gate passes and challans, but no clear finding was recorded on their relevance or contents. The department failed to correlate the documents with the goods in question or discharge the burden of proving the alleged clandestine removal. On the facts, the explanation offered by the appellant was found plausible and the evidence was insufficient to sustain the allegation that the goods were removed with intent to evade duty or that the penalty could be supported under the invoked provisions.

Conclusion: The charges were not established and the penalty could not be sustained, therefore the appellant succeeded.

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