Burden of proof requires affirmative corroborative evidence; theoretical input output demands and confiscations set aside without such proof.

Revenue failed to produce affirmative, tangible and corroborative evidence linking seized cash or seized goods to clandestine removals; claimants produced documentary explanations and registers which were not controverted. Demands based on theoretical input output calculations and selective reliance on Form IV without enquiries into buyers, transport, receipt of consideration or QTR corroboration were held unsustainable. Penalties requiring proof of wilful suppression were set aside because the foundational duty demands and confiscation findings lacked independent corroboration. All impugned confiscations, duty demands and penalties were annulled and appeals allowed.

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Issues: (i) Whether the cash sums seized from the factory and residential premises represented sale proceeds of clandestinely removed excisable goods and were liable to confiscation; (ii) Whether the goods seized from the premises of Basudeo Prasad & Sons were liable to confiscation as unaccounted / duty-unpaid goods; (iii) Whether the demands of Central Excise duty computed on the basis of alleged excess raw-material consumption and theoretical input-output calculations (including demands of Rs.1,81,006; Rs.1,71,149; Rs.32,88,080; Rs.4,92,525) were sustainable; (iv) Whether penalties imposed under central excise law were sustainable.

Issue (i): Whether the cash seized (Rs.3,46,000 and Rs.15,97,000) represented sale proceeds of clandestinely removed excisable goods and could be confiscated.

Analysis: The Department did not produce affirmative, tangible or corroborative evidence linking the seized currency to clandestine removals; claimants produced certificates, affidavits and documentary material explaining sources (sale of vehicle, sale of bullion, agricultural receipts, etc.); initial burden rests on the revenue to produce evidence establishing nexus between seized currency and sale proceeds of clandestine goods, failing which confiscation cannot be sustained. Relevant precedents cited apply the same principle.

Conclusion: The confiscation of Rs.15,97,000 and Rs.3,46,000 is set aside; the cash is not treated as sale proceeds of clandestinely removed goods (decision in favour of the assessee).

Issue (ii): Whether goods seized from Basudeo Prasad & Sons were liable to confiscation as duty unpaid.

Analysis: The responding dealer submitted 14 invoices and entries in PLA register and pappu long book indicating duty-paid status; the Department failed to address or controvert those documentary entries and relied on conjecture about pencil entries and alleged connivance; absence of cogent contrary evidence and lack of enquiry into corroborative matters undermined the confiscation finding.

Conclusion: The confiscation of goods seized from Basudeo Prasad & Sons is set aside (decision in favour of the assessee).

Issue (iii): Whether the duty demands computed on alleged excess consumption of raw material and theoretical input-output calculations are maintainable.

Analysis: The demands were founded on theoretical formulas and selective reliance on Form-IV without considering the quantitative stock register (QTR) and without independent corroboration (no enquiries as to buyers, transportation, receipt of consideration or other corroborative documentary evidence). Established authorities require affirmative corroborative evidence beyond approximation or single statements before confirming clandestine manufacture or clearance; absence of such evidence renders theoretical demand unsustainable.

Conclusion: The Central Excise duty demands (Rs.1,81,006; Rs.1,71,149; Rs.32,88,080; Rs.4,92,525) are set aside (decision in favour of the assessee).

Issue (iv): Whether penalties imposed under central excise law are sustainable.

Analysis: Penalties require proof of willful suppression or intent; since the Department failed to discharge onus regarding clandestine removal or suppression and the demands themselves are set aside for lack of corroborative evidence, there is no basis for upholding penalties; documentary records filed by appellants were not properly considered by lower authorities.

Conclusion: Penalties imposed on the appellant firm and on the other persons (specified amounts) are set aside (decision in favour of the assessee).

Final Conclusion: All impugned confiscations, duty demands and penalties are annulled and the appeals are allowed with consequential relief; the Department's case based on theoretical input-output calculations and uncorroborated assertions is rejected.

Ratio Decidendi: Where the Revenue alleges confiscation or duty on account of clandestine manufacture and removal, the initial burden to produce affirmative, tangible and corroborative evidence linking seized currency or excess production to clandestine clearances lies on the Revenue; demands founded on theoretical input-output calculations or uncorroborated statements, without enquiries into buyers, transportation, receipt of consideration and relevant statutory registers (such as QTR), are unsustainable.

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