Clandestine manufacture proved by stock discrepancies and private records, sustaining duty demand, confiscation and penalty.

Unaccounted stock, private production records and officers' statements were treated as sufficient evidence of clandestine manufacture and clearance, and the admitted clandestine production and removal of one variety of yarn further supported the revenue case. On that basis, the duty demands and consequential confiscation and penalty were held sustainable, and the challenge to the impugned order failed.

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Issues: Whether the duty demands, confiscation and penalty were sustainable in view of the alleged unaccounted stock, private records and admitted clandestine manufacture and clearance.

Analysis: The excess unaccounted stock was established by stock taking. The private production records, together with the statements of the appellants' officers, corroborated clandestine manufacture and clearance. The appellants also conceded clandestine production and removal of one variety of yarn. The evidence was found sufficient to support the duty demands and the consequential action.

Conclusion: The challenge to the impugned order failed and the appeal was rejected.

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