Clandestine removal can be proved by cumulative indirect evidence, while a partner's separate penalty may fail if the firm is already penalised.

Clandestine removal of iron and steel products may be established by a cumulative appraisal of private records, corroborative statements, weighbridge data and electricity-consumption patterns, even where some defence objections such as non-production of witnesses or lack of direct recovery are raised; on that basis, the duty demand and penalty on the main assessee were upheld. A separate personal penalty on a partner may not survive where the firm has already been penalised for the same contravention; on that basis, the partner's penalty was set aside. The commentary thus highlights that indirect evidence can support clandestine manufacture findings, but duplicative personal penalisation may be unsustainable on the same facts.

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Issues: (i) Whether the demand of central excise duty on alleged clandestine manufacture and removal of iron and steel products was sustainable on the basis of private records, corroborative statements, weighbridge records and electricity-consumption data. (ii) Whether the personal penalty imposed on the partner of the firm was sustainable.

Issue (i): Whether the demand of central excise duty on alleged clandestine manufacture and removal of iron and steel products was sustainable on the basis of private records, corroborative statements, weighbridge records and electricity-consumption data.

Analysis: The private note books recovered from third-party premises were linked to the assessee through statements of persons associated with the business and through reconciliation with statutory records. The entries in the private records were found to tally with recorded clearances, and the weighbridge records also supported the pattern of movement of raw materials and finished goods. The adjudicating authority further relied on electricity-consumption patterns to corroborate higher actual production during the disputed period. The defence based on non-production of certain persons for cross-examination and absence of direct recovery from the assessee's premises was not accepted as sufficient to displace the cumulative evidence of clandestine activity.

Conclusion: The demand of duty and the penalty on the main assessee were upheld.

Issue (ii): Whether the personal penalty imposed on the partner of the firm was sustainable.

Analysis: The Tribunal followed its earlier view that where the firm has already been penalised for the same contraventions, the partner is not liable to be separately penalised on the facts of the case. On that basis, the personal penalty on the partner was found unsustainable.

Conclusion: The personal penalty on the partner was set aside.

Final Conclusion: The adjudication on clandestine removal and duty liability was sustained, but the separate penalty on the partner was annulled, leaving the assessees only partially successful.

Ratio Decidendi: A charge of clandestine removal may be sustained on a cumulative appreciation of private records, corroborative statements, weighbridge evidence and electricity-consumption data, and a separate personal penalty on a partner may not survive where the firm itself has already been penalised for the same contravention.

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