Uncorroborated private records cannot sustain clandestine removal demand; confiscation and penalties also fail where the levy does not attract them.

A duty demand based on private register entries alleging clandestine production and removal was rejected because the entries were uncorroborated, the reasoning depended on presumption rather than proof, and no supporting worker evidence or reliable cross-check established the demand. Confiscation of goods, land and building, and penalties on the assessee and its partners were also held unsustainable because Central Excise confiscation and penalty provisions were not attracted to the levy under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The duty demand, confiscation, and penalties were set aside.

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Issues: (i) Whether the demand of duty based on the private register No. 8 was sustainable on the evidence recorded; (ii) whether confiscation of goods, land and building and the penalties imposed on the assessee and its partners were legally sustainable.

Issue (i): Whether the demand of duty based on the private register No. 8 was sustainable on the evidence recorded.

Analysis: The entries in the private register were relied upon as showing clandestine production and removal, but the finding rested largely on the presence of the word "finished". The register was only one of the private records seized from the unit, and the evidence was not strengthened by examination of the workers or other corroborative material. The reasoning proceeded on presumption rather than proof, and the comparison with the RG 1 register did not establish a reliable basis for the duty demand.

Conclusion: The duty demand based on register No. 8 was not sustainable and was set aside in favour of the assessee.

Issue (ii): Whether confiscation of goods, land and building and the penalties imposed on the assessee and its partners were legally sustainable.

Analysis: The Tribunal applied the legal position that the provisions of the Central Excise law relating to confiscation and penalty were not attracted for the levy under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, as reflected in the binding line of reasoning followed by the Tribunal. In that view, the confiscation of the assets and the penalties imposed on the assessee and the partners could not be sustained.

Conclusion: The confiscation and penalties were not sustainable and were set aside in favour of the assessee.

Final Conclusion: The impugned order did not survive scrutiny, and the assessee obtained full relief against both the duty demand and the penal consequences.

Ratio Decidendi: A duty demand for alleged clandestine removal cannot rest on uncorroborated private entries and presumption alone, and confiscation or penalty under the Central Excise framework cannot be sustained where the governing levy does not extend those consequences.

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