Invalid invoices and defective depot records justified confiscation, while redemption fine and penalty were reduced as excessive.

Excisable goods removed under invalid invoices and without proper statutory records were held liable to confiscation because the depot records, invoices and explanation for removal were unreliable and the mandatory Central Excise procedural requirements were not complied with. The confiscation was sustained, but the redemption fine and penalty were reduced on the facts as excessive while the contravention finding remained unchanged.

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Issues: (i) whether the goods intercepted at the depot and in transit were liable to confiscation for being removed under invalid invoices and without proper statutory compliance; (ii) whether the redemption fine and penalty required reduction.

Issue (i): whether the goods intercepted at the depot and in transit were liable to confiscation for being removed under invalid invoices and without proper statutory compliance.

Analysis: The removal of the goods on 11-1-1999 was not satisfactorily explained. The purported consignee denied having placed the purchase order or having received the goods in the manner suggested by the appellant. The depot records and invoices were found to be unreliable, and the goods were not covered by valid documents. The applicable procedural requirements under the Central Excise Rules were treated as mandatory, and the failure to maintain proper statutory records and issue correct invoices supported the conclusion that the goods were liable to confiscation.

Conclusion: The confiscation of the goods was sustained against the appellant.

Issue (ii): whether the redemption fine and penalty required reduction.

Analysis: Although confiscation was upheld, the quantum of redemption fine and penalty was considered excessive in the facts of the case. The interests of justice were found to be met by moderating the monetary burden while maintaining the finding of contravention.

Conclusion: The redemption fine and penalty were reduced to Rs. 10 lakhs and Rs. 5 lakhs respectively in favour of the appellant.

Final Conclusion: The appeal succeeded only to the limited extent of reduction of the redemption fine and penalty, while the confiscation finding remained undisturbed.

Ratio Decidendi: Where excisable goods are removed under invalid invoices and statutory depot records are not properly maintained, confiscation can be sustained; however, the quantum of redemption fine and penalty may be reduced if found excessive on the facts.

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