Clandestine removal allegations failed where invoice errors were procedural, leading to deletion of duty demand and reduction of penalty.

Duty demand based on alleged clandestine removal was not sustained because the material on record did not establish clandestine manufacture, clandestine clearance, or receipt of goods by the buyer. The invoice discrepancies were explained as mistaken preparation in the name of one party while the goods were actually supplied to another, so the evidentiary basis for clandestine removal was insufficient. The lapse was confined to a procedural failure to cancel invoices that were not used for clearance, and the penalty was reduced accordingly.

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Issues: Whether the demand of duty and penalty could be sustained on the allegation of clandestine removal based on duplicate invoices, and whether the penalty required reduction where the lapse was confined to non-cancellation of invoices.

Analysis: The available material did not establish clandestine manufacture, clandestine removal, or receipt of goods by the buyer. The evidentiary basis for the demand was insufficient, and the surrounding facts indicated that the invoices were mistakenly prepared in the name of one party though the goods were supplied to another. The default was confined to a procedural failure to cancel invoices that were not used for clearance of goods.

Conclusion: The duty demand was set aside, and the penalty was reduced in view of the procedural nature of the lapse.

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