Clandestine removal demands tangible corroboration; private records and statements alone are insufficient to sustain duty and penalties.

Clandestine manufacture and clearance can be sustained only on positive, tangible and corroborative evidence of actual unaccounted production and removal. Private records, pen drive data and statements, without independent support such as excess raw material procurement, transport proof, sale proceeds, electricity use, labour records or other operational indicators, are insufficient to establish the charge. On that basis, a demand for duty, interest and penalties based on the same unproved foundation cannot be sustained, and the impugned order was set aside with consequential relief.

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Issues: Whether the charge of clandestine manufacture and clandestine clearance was established on the basis of private records, pen drive data and statements, and whether the consequential demand of duty, interest and penalties could be sustained.

Analysis: The charge of clandestine removal was examined as a serious allegation requiring positive, tangible and corroborative evidence. The materials relied upon by the Revenue consisted mainly of seized records, pen drive data and statements, but the record did not disclose independent corroboration such as excess raw material procurement, proof of actual transport, sale proceeds, electricity consumption, labour or other operational indicators ordinarily expected in a clandestine removal case. The private records and statements were treated as insufficient by themselves, because clandestine clearance cannot rest on presumption, inference or unwarranted assumption. The demand and penalties also depended on the same unproved foundation.

Conclusion: The charge of clandestine clandestine manufacture and clearance was not proved, and the demand of duty, interest and penalties could not be sustained.

Final Conclusion: The impugned order was set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: A demand for clandestine removal can be sustained only on tangible, corroborative evidence establishing actual unaccounted manufacture and clearance, and not merely on private records, pen drive data, statements or presumptions.

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