Unproved authentication of gate-pass particulars cannot sustain clandestine removal demand and penalty without clear pleading and evidence.

Duty demand and penalty for alleged clandestine removal could not be sustained where the foundational fact of authentication of gate-pass particulars was neither specifically alleged in the show cause notice nor proved on record. The department relied on an assumed verification by an authorised signatory, but the assessee had denied the existence of the gate-pass book and any authentication, and the exact particulars noted by the audit party were not produced. The material on record was therefore insufficient to support the allegation, and the demand and penalty failed for want of clear pleading and proof of the basic evidentiary foundation.

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Issues: Whether the demand of duty and penalty based on alleged clandestine removal could be sustained when the alleged authentication of the audit party's particulars and the exact verification relied upon by the department were not clearly pleaded or proved.

Analysis: The demand rested on an asserted authentication of particulars copied from a gate-pass book by the appellants' authorised signatory. The show cause notice, however, did not specifically allege such authentication, and the reply had denied both the existence of the alleged gate-pass book and any authentication of the particulars. The adjudicating authority proceeded on an assumed fact not confronted to the appellants, and the appellate authority did not address this defect. In the absence of the exact copy of the particulars noted by the audit party and the form of the alleged authentication, the evidentiary basis for the finding remained unproved.

Conclusion: The demand and penalty could not be sustained on the material on record, and the appeal was allowed in favour of the assessee.

Ratio Decidendi: A demand for duty and penalty cannot be upheld on an assumed or unproved factual foundation of authentication or verification when that foundational fact is neither clearly alleged in the show cause notice nor established by the department on the record.

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