Clandestine removal requires positive corroborative evidence; register discrepancies alone were insufficient to sustain duty and penalty

Discrepancies in RG1 and production records, including double entries, non-posting and mismatch with gate passes, were found insufficient to prove clandestine removal where the explanation of faulty accounting remained plausible. In the absence of further enquiry or positive corroborative evidence of illicit removal, mere irregular maintenance of the statutory register did not establish clandestine clearance. The allegation of clandestine removal therefore failed, and the duty demand and penalty could not be sustained.

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Issues: Whether the discrepancies in the RG1 register and production records established clandestine removal of the machines and justified demand of duty and penalty.

Analysis: The discrepancies in the register were supported by documentary material showing double entries, non-posting of entries, and a mismatch between production reports and gate passes. The explanation that the errors arose from faulty accounting and repeated entries was found to be plausible. No further enquiry was made to test the alleged inconsistencies, and no positive or corroborative evidence was brought by the department to prove illicit removal. Mere irregular maintenance of the statutory register was held insufficient, by itself, to establish clandestine clearance.

Conclusion: The allegation of clandestine removal was not established, and the duty demand and penalty could not be sustained.

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