Clandestine removal needs corroborative evidence; mere gate pass irregularities cannot sustain confiscation or excessive penalty.

Confiscation for alleged clandestine removal and non-accompaniment of gate pass documents was not sustainable where the record showed only discrepancies and procedural lapses, and there was no independent or corroborative evidence of a double transaction or intent to evade duty. The goods were otherwise duty-paid, so mere suspicion could not justify confiscation of the goods or the tempo, and that portion was set aside. The penalty was also found excessive in the facts, because the lapse was technical rather than deliberate, but some penal consequence was still warranted, so the penalty was reduced.

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Issues: (i) Whether the confiscation of the goods and the tempo was sustainable on the allegation of clandestine removal and non-accompaniment of gate pass documents; (ii) whether the penalty imposed on the appellant called for interference.

Issue (i): Whether the confiscation of the goods and the tempo was sustainable on the allegation of clandestine removal and non-accompaniment of gate pass documents.

Analysis: The record showed discrepancies in the gate passes, timings, and supporting documents, but the appellant explained the omissions as errors of the excise clerk and accidental non-endorsement or non-carrying of the correct papers. The evidence did not establish any independent or corroborative material proving a double transaction or clandestine removal. The goods were otherwise duty-paid, and the alleged irregularities were treated as procedural lapses rather than proof of an offending removal. Mere suspicion and documentary irregularities were held insufficient to justify confiscation.

Conclusion: The confiscation of the goods and the tempo was not sustainable and was set aside.

Issue (ii): Whether the penalty imposed on the appellant called for interference.

Analysis: The circumstances indicated only a technical lapse and an error in procedure, with no established intent to evade duty. However, the lapse was not ignored altogether, and the facts warranted some penal consequence, though not at the original level imposed. The penalty was therefore considered excessive in the facts of the case and liable to be moderated.

Conclusion: The penalty was reduced to Rs. 50,000.

Final Conclusion: The appeal succeeded to the extent that confiscation was annulled and the penalty was substantially reduced, while the adjudication otherwise stood modified accordingly.

Ratio Decidendi: Confiscation and substantial penalty in central excise matters cannot rest on suspicion or procedural irregularities alone in the absence of independent evidence proving clandestine removal or intent to evade duty.

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