Pre-dated gate passes alone cannot prove clandestine removal; duty demand and confiscation fail without corroborative evidence.

Pre-dated gate passes, without independent corroborative evidence of clandestine removal or duty evasion, were held insufficient to sustain duty demand or confiscation. The record showed no verification from the consignee and no reliable departmental proof of actual production or stock position, so the demand and confiscation were set aside. Although the assessee had violated procedural requirements by ante-dating documents, the penalty was reconsidered in light of the absence of proof of clandestine removal and was reduced to Rs. 10,000.

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Issues: (i) Whether duty demand and confiscation could be sustained merely on the basis of pre-dated gate passes without independent evidence of clandestine removal; (ii) Whether the penalty imposed required interference.

Issue (i): Whether duty demand and confiscation could be sustained merely on the basis of pre-dated gate passes without independent evidence of clandestine removal.

Analysis: The record did not establish that the goods had in fact been removed earlier or that any quantity had been cleared without payment of duty. No verification was made from the consignee, and the departmental record did not show the actual position of production and balance stock. In these circumstances, pre-dating of gate passes by itself was insufficient to conclude evasion of duty or illicit removal.

Conclusion: The demand for duty and the order of confiscation were not sustainable and were set aside.

Issue (ii): Whether the penalty imposed required interference.

Analysis: Although the assessee had contravened procedure by ante-dating the relevant documents, the penalty required reconsideration in the light of the absence of proof of clandestine removal and the limited nature of the established contravention.

Conclusion: The penalty was reduced to Rs. 10,000.

Final Conclusion: The appeal succeeded to the extent that the duty demand and confiscation were set aside, while the penalty was reduced.

Ratio Decidendi: Pre-dating of gate passes, without independent corroborative evidence of clandestine removal or duty evasion, is insufficient to sustain confiscation or duty demand.

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