Clubbing of clearances needs corroborative evidence; suspicion alone cannot sustain differential duty, though seized goods may still be confiscated.

Clubbed-clearance duty demands require cogent corroborative evidence of common control, intermingling of production, procurement and labour; a single suspicious circumstance is not enough to treat one match unit as a dummy front for another. On the facts recorded, the absence of further investigation, employee statements and supporting material meant differential duty could not be sustained for the whole period. The goods actually seized at inspection remained liable to confiscation, and the penalty was moderated on the facts.

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Issues: Whether the clearances of two match units could be clubbed and differential duty demanded on the basis that one unit was only a front or dummy for the other, and whether the confiscation of seized goods and penalty could be sustained.

Analysis: The record showed only a surprise detection of packing material of one unit being used in the other unit. That circumstance created suspicion, but no further investigation was undertaken to establish the alleged intermingling of production, control of operations, procurement of raw materials, or the role of workers. No statements were recorded from employees and no corroborative material was brought on record to show that the entire production in one unit had been manufactured in the other or that one unit was merely a fac ade. Mere suspicion and presumptions were held insufficient to fasten duty liability for the whole period. At the same time, the goods actually seized on the date of inspection remained liable to confiscation, and the penalty warranted moderation in the facts of the case.

Conclusion: The demand of differential duty based on clubbing of clearances was set aside, while confiscation of the seized goods was upheld and the penalty was reduced.

Ratio Decidendi: A duty demand based on alleged clubbing of clearances cannot rest on a single suspicious circumstance alone and must be supported by cogent, corroborative evidence gathered through proper investigation.

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