Clandestine removal duty can be based on detection date when clearance date is unknown; penalty may be reduced on equitable grounds.

Where clandestine removal of goods was established but the actual date of clearance could not be proved, duty was computed by applying Rule 9A(5) with the date of detection as the relevant basis, and year-wise allocation on the basis of raw material purchases was rejected as conjectural. The quantified quantity of removed goods was not disputed, so the excise demand was sustained. The penalty, however, was reduced because the proceedings had remained pending for a long period and the demand had already been substantially reduced in re-adjudication, making a lesser penalty sufficient in the circumstances.

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Issues: (i) whether duty on clandestinely removed goods, where the actual date of clearance was not known, could be charged by applying Rule 9A(5) on the date of detection rather than by allocating the quantity year-wise; and (ii) whether the penalty warranted reduction in the circumstances of the case.

Issue (i): whether duty on clandestinely removed goods, where the actual date of clearance was not known, could be charged by applying Rule 9A(5) on the date of detection rather than by allocating the quantity year-wise.

Analysis: The quantified quantity of goods removed clandestinely was not disputed, and there was no evidence to show when the goods were actually cleared. In the absence of proof of the dates of clearance, year-wise allocation on the basis of the dates of purchase of raw material would rest only on conjecture. Where the date of clearance is unknown, the applicable excise provision treats the date of detection as the relevant basis for duty liability.

Conclusion: The duty demand based on the rate applicable under Rule 9A(5) was upheld and the plea for year-wise allocation was rejected.

Issue (ii): whether the penalty warranted reduction in the circumstances of the case.

Analysis: Although the duty demand was sustained, the proceedings had continued for a long period and the demand had already been substantially reduced on re-adjudication. Taking those circumstances into account, a lesser penalty was considered sufficient to meet the ends of justice.

Conclusion: The penalty was reduced.

Final Conclusion: The duty demand was sustained on the basis of the relevant excise rule for cases where the date of clearance is not known, but the penalty was reduced in view of the long pendency and overall circumstances.

Ratio Decidendi: Where clandestine clearances are established but the actual date of clearance cannot be proved, duty may be computed with reference to the date fixed by the governing excise rule, and penalty may be moderated on equitable considerations.

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