Clandestine removal was not proved for processed fabrics; duty demand and penalty failed for want of sufficient evidence.

Evidence of clandestine removal of processed man-made fabrics was found insufficient where the record did not displace the explanation that shortages could arise from ordinary batch processing, stitching of grey fabrics for dyeing and printing, and later segregation after finishing. The burden remained on the Department to prove clandestine removal, and that burden was not discharged on the material available. As a result, the duty demand and penalty could not be sustained, and the assessee obtained relief.

---

---

Issues: Whether the evidence on record was sufficient to establish clandestine removal of processed man-made fabrics and justify confirmation of duty demand and penalty.

Analysis: The material on record, including the statement recorded at the time of inspection and the explanation regarding intermixing of lots during processing, was found insufficient to prove clandestine removal. The Tribunal held that shortage in different lots could arise during the ordinary course of processing, where grey fabrics are handled in batches, stitched together for dyeing and printing, and later segregated only after final finishing. The Department was found not to have discharged the burden of proving clandestine removal.

Conclusion: The demand of duty and penalty could not be sustained, and the appeal succeeded.

Final Conclusion: The impugned order was set aside and the assessee obtained relief from the duty demand and penalty.

---