Clandestine production and removal require positive evidence; private records from a raid were not enough to sustain the charge.

Private records recovered during a raid were considered insufficient by themselves to establish clandestine production and removal of goods for the relevant period. The Court stated that such a charge must be supported by positive evidence, even where the recovered material is read with other supporting evidence. On that basis, the issue was answered against the revenue and in favour of the assessee.

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Issues: Whether, on the basis of private records recovered during a raid, there was positive evidence of clandestine production and removal of goods during the relevant period.

Analysis: The question referred for adjudication turned on whether the material recovered in the raid, even when read with supporting evidence, established the requisite positive evidence of clandestine production and removal. The Court held that such clandestine activity cannot be upheld without positive evidence.

Conclusion: The issue was answered against the revenue and in favour of the assessee.

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