Central Excise procedural breach sustained confiscation, but absence of evasion reduced redemption fine and penalty.

Breach of Central Excise procedural requirements justified confiscation of the goods and appropriation of the duty already paid towards the duty liability. The goods had been cleared contrary to Rules 52A, 9(1), 173G, 224 and 226 of the Central Excise Rules, 1944, so confiscation was sustained. However, the absence of a deliberate attempt to evade duty was treated as a mitigating factor, and no penalty was imposed under Section 11AC of the Central Excise Act, 1944. On that basis, the redemption fine and the penalty under Rule 173Q were substantially reduced, granting partial relief to the assessee.

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Issues: Whether violation of the Central Excise procedural rules justified confiscation of the goods, appropriation of the duty amount, and imposition of redemption fine and penalty.

Analysis: The goods were found to have been cleared in breach of the applicable excise procedure, including the requirements under Rules 52A, 9(1), 173G, 224 and 226 of the Central Excise Rules, 1944. On that basis, confiscation was sustained and the duty already paid was appropriated towards the duty liability. At the same time, the adjudicating authority had found absence of a deliberate attempt to evade duty and had not imposed penalty under Section 11AC of the Central Excise Act, 1944. Taking that mitigating factor into account, the redemption fine and the penalty under Rule 173Q were reduced.

Conclusion: Confiscation and duty appropriation were upheld, but the redemption fine and penalty were substantially reduced, resulting in partial relief to the assessee.

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