Duty demand on alleged removal requires proof and a reasoned speaking order; incomplete records alone are not enough.

Duty demand cannot be sustained merely because records were incomplete or material was treated as consumed in manufacture; proof of removal without payment of duty remains essential. The commentary further notes that where the order does not contain a reasoned determination on the extent of forging loss, if any, to be disallowed, the matter requires fresh examination. A speaking order is necessary to support any disallowance and consequent demand. The dispute was therefore remanded to the Commissioner for fresh adjudication and a reasoned decision on the loss issue.

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Issues: Whether the disallowance of forging loss and the consequent duty demand could be sustained without establishing removal of goods without payment of duty and without a speaking order.

Analysis: Duty cannot be demanded merely on the basis that the assessee did not maintain proper records or that a quantity of material was treated as used in manufacture; removal without payment of duty must be established. The order under challenge did not record a speaking determination on the extent of loss, if any, to be disallowed, and the issue required fresh examination in accordance with law.

Conclusion: The matter was remanded to the Commissioner for fresh determination of the extent of loss, if any, to be disallowed, and for passing a speaking order.

Final Conclusion: The dispute was not finally decided on merits and was sent back for reconsideration.

Ratio Decidendi: A duty demand based on alleged removal must rest on proof of removal and a reasoned determination; absence of a speaking order justifies remand for fresh adjudication.

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