Clandestine removal allegations require proper record correlation; inadequate shortage verification led to remand for fresh examination.

Allegations of clandestine removal of nylon POY yarn and defective record maintenance were found unsupported by a complete evidentiary foundation, because the alleged shortages were not properly worked out from statutory records or physical verification. The appellants had produced a receipts-and-disposals chart, but the adjudicating authority had not correlated total receipts, clearances, wastage, and returns to the parent unit. The matter was remanded for fresh examination of the records and the explanation offered, so that any shortage could be determined in accordance with law.

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Issues: Whether the demand of duty and penalties based on alleged clandestine removal of 19,260 Kgs of nylon POY yarn and alleged defects in record maintenance could be sustained, or whether the matter required remand for fresh examination of receipts and disposals.

Analysis: The Department's case rested on an internal communication and on presumed shortages, but the shortages were not worked out from statutory records and physical verification in a complete manner. The appellants had produced a chart showing the receipts of nylon filament yarn and the corresponding disposals, and the adjudicating authority had not examined that material by correlating total receipts, clearances, wastage, and returns to the parent unit. In these circumstances, the evidentiary foundation for the alleged clandestine removal was found inadequate and the correct shortage, if any, had to be determined after a proper scrutiny of the records and the appellants' explanation.

Conclusion: The matter was remanded to the adjudicating authority for fresh consideration of the receipts and disposals and for determination of any shortage in accordance with law.

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