Clandestine removal demands need admissible electronic evidence and independent corroboration; untested statements alone are insufficient.

Statements recorded during investigation and computer printouts from a pen drive can be relied on only after compliance with the mandatory procedures for admitting statements and proving electronic records; otherwise, they lack substantive evidentiary value. A clandestine removal allegation must also be supported by independent corroborative evidence, such as proof of excess raw material, electricity use, transport movement, buyers, or cash flow. Private papers, wage sheets, or estimated production figures alone are insufficient. On the stated facts, the demand, interest, and penalties could not be sustained and the impugned order was set aside.

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Issues: (i) Whether statements recorded during investigation and computer printouts from a pen drive could be relied upon without compliance with the mandatory procedural requirements governing admissibility of statements and electronic records; (ii) Whether the allegation of clandestine removal was proved on the basis of the materials on record in the absence of corroborative evidence.

Issue (i): Whether statements recorded during investigation and computer printouts from a pen drive could be relied upon without compliance with the mandatory procedural requirements governing admissibility of statements and electronic records.

Analysis: The evidentiary value of statements recorded during investigation depends on compliance with the statutory procedure for admitting such statements in adjudication. In the same manner, computer printouts and other electronic material can be acted upon only when the requirements for proving electronic records are satisfied. Where the department relies on such material without following the prescribed procedure, the material cannot be treated as substantive evidence.

Conclusion: The statements and electronic printouts were not admissible as reliable evidence against the assessee.

Issue (ii): Whether the allegation of clandestine removal was proved on the basis of the materials on record in the absence of corroborative evidence.

Analysis: A charge of clandestine removal must be established by tangible and corroborative evidence. Private papers, wage sheets, or estimated production figures, without supporting proof of excess raw material purchase, electricity consumption, transport movement, buyers, cash flow, or other connecting evidence, are insufficient. In the absence of such corroboration, the demand and penalties cannot be sustained.

Conclusion: The allegation of clandestine removal was not proved and the demand and penalties could not survive.

Final Conclusion: The impugned demand, interest, and penalties were set aside, and the appeals succeeded with consequential relief.

Ratio Decidendi: A demand for clandestine removal cannot rest on untested statements or electronic material unless the statutory rules of admissibility are complied with, and it must be supported by independent corroborative evidence establishing the removal.

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