Clandestine production demands require proper evidence review; duty demand remanded, but confiscation and redemption fine upheld.

Duty demand based on alleged excess production and Sunday production could not be finally affirmed because the material on record was not properly examined, including electricity restrictions, production incentive records, and the statutory scheme for the relevant production week. The findings on clandestine removal were considered too sketchy, so the demand required fresh adjudication and redetermination after a proper hearing. Confiscation of excess stock and the fine in lieu of confiscation were not interfered with, as no sufficient ground was shown to disturb that part of the order. The matter was thus reopened only on the duty demand, while the confiscation portion remained undisturbed.

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Issues: (i) whether the duty demand based on alleged excess production and Sunday production could be sustained on the material and findings recorded; (ii) whether the confiscation of goods and fine in lieu of confiscation called for interference.

Issue (i): Whether the duty demand based on alleged excess production and Sunday production could be sustained on the material and findings recorded.

Analysis: The demand in the first annexure rested on an assumption of 24 hours power availability, although the record contained evidence distinguishing a power cut from peak load restriction and also showed a notified restriction on industrial consumption during peak hours. The production incentive scheme, the working reports and the available electricity-related evidence required a proper examination before adopting the higher production target. The second annexure proceeded on the footing that Sunday production was nil in the statutory register, although the incentive scheme itself covered the production week from one Sunday to the next. The findings on these issues were considered too sketchy, and the aspect of clandestine removal required clearer proof rather than assumption. The matter therefore required reconsideration and redetermination after proper hearing.

Conclusion: The duty demand was not finally sustained and the matter was remanded for fresh adjudication and redetermination.

Issue (ii): Whether the confiscation of goods and fine in lieu of confiscation called for interference.

Analysis: The excess stock found on verification was treated as warranting confiscation. On the record before the Tribunal, no sufficient ground was shown to disturb that part of the adjudication order.

Conclusion: The confiscation and fine in lieu of confiscation were upheld.

Final Conclusion: The appeal succeeded only to the extent of reopening the duty demand for fresh decision, while the confiscation and redemption fine remained undisturbed.

Ratio Decidendi: A duty demand alleging clandestine production and removal cannot be affirmed where the adjudicating authority has not properly considered material evidence bearing on production calculation and the statutory scheme, and the issue must be re-examined on a reasoned factual basis.

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