Clandestine removal claims need corroborated evidence; unverified computer printouts and third-party royalty records were insufficient.

Clandestine removal allegations based on GEQD-retrieved computer printouts and third-party royalty entries require independent corroboration before duty and penalties can be sustained. Where there is no proof of excess electricity consumption, unaccounted raw materials, transport activity, identified buyers, or flow-back of sale proceeds, and where the electronic records are inadmissible or unsupported by lawful control over the devices, the demand fails. The absence of cross-examination of relied-upon witnesses and the lack of tangible evidence linking the assessee to clandestine manufacture or clearance make the charge unsustainable.

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Issues: Whether the demand of duty and the penalties could be sustained on the basis of GEQD-retrieved data and third-party records alleging higher royalty and clandestine manufacture and clearance of TMT bars.

Analysis: The demand was founded essentially on computer printouts and alleged royalty entries recovered from third-party premises, without independent corroboration of actual excess manufacture or clearance. There was no evidence of excess consumption of electricity, procurement of raw materials outside the books, use of transporters, identification of buyers, or flow-back of sale proceeds. The electronic printouts themselves were treated as inadmissible, and the absence of lawful control over the computers and devices further weakened their evidentiary value under the statutory rule governing computer-generated records. In the absence of cross-examination of relied-upon witnesses and in the absence of positive proof linking the appellant to any clandestine activity, the allegation remained unsupported by tangible evidence.

Conclusion: The demand of duty and the consequential penalties were not sustainable and were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded, and the impugned demand and penalties were annulled for want of reliable, corroborated evidence of clandestine removal.

Ratio Decidendi: A charge of clandestine removal cannot be sustained on uncorroborated third-party computer records or assumptions of higher royalty; the Revenue must prove actual manufacture and clearance by tangible, admissible evidence, including corroboration of inputs, electricity, transport, buyers, and proceeds.

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