Clear evidence required for clandestine removal, duty on identifiable scrap goods upheld, and doubtful confiscation set aside.

Clandestine removal in excise must be supported by clear, reasoned evidence; where reconciliation is incomplete or the record is uncertain, a fresh speaking determination on duty liability is required. Damaged or scrap television sets remained identifiable as excisable goods, so duty was payable once their identity as television sets was established. Confiscation for non-accountal in the RG 1 register was not justified where the evidence was doubtful, the panchnama lacked material particulars, and the officers' versions were inconsistent; the confiscation was therefore set aside.

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Issues: (i) Whether the alleged clandestine removal of 754 television sets was established so as to sustain the duty demand. (ii) Whether duty was payable on 54 television sets sold to employees as scrap or damaged goods. (iii) Whether confiscation of 43 television sets for non-accountal in the RG 1 register was justified.

Issue (i): Whether the alleged clandestine removal of 754 television sets was established so as to sustain the duty demand.

Analysis: The reconciliation exercise and the findings recorded in the order did not contain a clear, reasoned determination showing why the remaining quantity was treated as cleared without payment of duty. The conclusion on clandestine removal was found to be guarded and unsupported by adequate reasons. In the circumstances, and having regard to the large volume of documents and entries involved, a fresh speaking order was required on duty liability.

Conclusion: The demand based on alleged clandestine removal of 754 television sets was not finally sustained and the matter was remanded for a speaking order.

Issue (ii): Whether duty was payable on 54 television sets sold to employees as scrap or damaged goods.

Analysis: The goods were identifiable as television sets, and the duty was specific. Their damaged condition did not affect chargeability once the goods remained identifiable as television sets. The finding that they were in working order also supported duty liability.

Conclusion: Duty on the 54 television sets was rightly upheld against the assessee.

Issue (iii): Whether confiscation of 43 television sets for non-accountal in the RG 1 register was justified.

Analysis: There was doubt whether the sets had been fully manufactured, tested, and packed, and the panchnama was silent on the material details. The evidence of the officers was contradictory, and the record did not conclusively establish that the goods were liable to confiscation under Rule 173Q of the Central Excise Rules.

Conclusion: Confiscation of the 43 television sets was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded in part, with confiscation set aside for 43 television sets, duty confirmed for 54 television sets, and the larger duty dispute on 754 television sets sent back for fresh speaking determination.

Ratio Decidendi: A finding of clandestine removal or confiscability in excise matters must rest on clear, reasoned, and supported evidence, and where the record is uncertain the benefit of doubt goes to the assessee.

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