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Issues: (i) Whether the duty demand based on the bundling note book, statements of the labour contractor and company personnel, and electricity-consumption pattern could be sustained as proof of clandestine manufacture and clearance; (ii) Whether the penalty imposed under the Central Excise Rules was excessive.
Issue (i): Whether the duty demand based on the bundling note book, statements of the labour contractor and company personnel, and electricity-consumption pattern could be sustained as proof of clandestine manufacture and clearance.
Analysis: The entries in the bundling note book were not shown to be false or unreliable, and the statement of the labour contractor remained unchallenged. The statements of the concerned persons and the electricity-consumption pattern furnished corroboration for the department's case. On the facts, the evidence was found sufficient to establish clandestine manufacture and removal, and the challenge that the demand rested only on assumptions was rejected.
Conclusion: The duty demand was upheld in favour of Revenue.
Issue (ii): Whether the penalty imposed under the Central Excise Rules was excessive.
Analysis: The penalty was assessed against the background of proved clandestine removal and was not found to be disproportionate in the circumstances of the case.
Conclusion: The penalty was sustained and was not reduced.
Final Conclusion: The order confirming duty demand and penalty for clandestine removal was affirmed, and the appeal was dismissed.
Ratio Decidendi: Clandestine removal may be proved by reliable contemporaneous records, unchallenged statements, and corroborative circumstances such as electricity consumption, and such evidence can sustain duty demand and penalty under the Central Excise Rules.
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