Penalty for seized goods requires proof of linkage; silence in proceedings alone does not establish culpability.

Penalty for seized goods cannot be sustained without evidence linking the appellants to the goods, even if they did not reply to the show-cause notice or appear for personal hearing. The appellants had consistently denied ownership from the outset, and the statements on record, including that of a person present at the spot, supported the explanation that the bag had been left by an unknown person. In the absence of any Revenue evidence connecting the appellants with the seized fabrics, mere non-participation in the adjudication proceedings did not establish culpability or guilty mind. The penalty was therefore set aside.

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Issues: Whether penalty could be sustained against the appellants for the seized fabrics in the absence of evidence linking them to the goods and merely because they did not reply to the show-cause notice or appear for personal hearing.

Analysis: The appellants consistently denied ownership of the seized fabrics from the outset, and the available statements, including that of another person present at the spot, supported their version that the bag had been left by an unknown person. No evidence was brought on record by the Revenue to connect the appellants with the seized goods. Failure to contest the proceedings before the adjudicating authority did not, by itself, establish culpability or guilty mind.

Conclusion: The penalty was not justified and was set aside.

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