Confiscation for transit clearance without duty debit survived, as later duty payment did not cure the original infraction.

Goods intercepted in transit were treated as liable to confiscation where the accompanying invoice showed no debit of duty at the time of removal, and the surrounding circumstances indicated removal without payment of duty. The assessee's later explanation that records were available elsewhere for audit was not part of the contemporaneous defence, and the existence of balances in RG 23A Pt-II did not displace the inference drawn from the missing debit entry. Subsequent payment of duty under different invoices did not cure the original infraction. On those facts, confiscation and penalty were sustained.

---

---

Issues: Whether the confiscation of the seized DG sets and the penalty on the assessee company were sustainable when the goods were intercepted without a duty debit entry in the invoice and the assessee claimed that records were available elsewhere for audit.

Analysis: The goods were intercepted in transit and the accompanying invoice did not show debit of duty. The assessee's explanation that the excise records had been taken to Ahmedabad for tax audit was not part of the contemporaneous case made out during investigation. The existence of balance in RG 23A Pt-II did not displace the inference drawn from the absence of debit entry at the time of removal. Subsequent payment of duty under different invoices did not alter the character of the goods at the time of interception. The confiscation and penalty were therefore justified on the facts found by the adjudicating authority.

Conclusion: The confiscation of the goods and the penalty on the company were upheld and the Revenue's challenge succeeded.

Final Conclusion: The adjudication restored the confiscation and company penalty, leaving no relief in favour of the assessee on the substantive issue.

Ratio Decidendi: Goods intercepted in transit are liable to confiscation where the contemporaneous documents show no duty debit and the surrounding circumstances indicate removal without payment of duty, and a later payment of duty does not cure the original infraction.

---