Confiscation and penalty require proven culpability, with vehicle confiscation and personal liability not sustainable on these facts.

Confiscation of a conveyance requires proof that the transporter knowingly carried goods liable to confiscation; where the tempo driver produced a challan and the record showed normal precautions, confiscation of the vehicle and the related redemption fine were not sustainable. Confiscation of excess finished goods was upheld, but unaccounted raw material could not be confiscated absent a rule creating such liability; the associated redemption fine on finished goods was reduced and that on raw material was set aside. Penalty under section 11AC was reduced, the proprietor's penalty was sustained but scaled down to the prescribed maximum for each violation, and the manager's personal penalty was deleted for lack of established personal liability.

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Issues: (i) whether the tempo used for transport was liable to confiscation and redemption fine; (ii) whether confiscation of excess finished goods and unaccounted raw material, with the related redemption fines, could be sustained; (iii) whether the penalty under section 11AC and the personal penalties on the proprietor and manager were justified, and to what extent.

Issue (i): whether the tempo used for transport was liable to confiscation and redemption fine.

Analysis: The tempo was intercepted while the driver produced a challan covering the goods being carried. The record showed that the transporter had taken normal precautions by carrying documents issued by the factory from which the goods were loaded. On those facts, the transporter could not be said to have knowingly carried goods liable to confiscation, and the vehicle owner could not be attributed the requisite knowledge or culpability for confiscation of the conveyance.

Conclusion: The confiscation of the tempo and the redemption fine were not sustainable and were set aside.

Issue (ii): whether confiscation of excess finished goods and unaccounted raw material, with the related redemption fines, could be sustained.

Analysis: The confiscation of the excess finished goods found in the tempo was upheld, but the confiscation of the unaccounted raw material was not supported by any rule establishing liability to confiscation of such material. The redemption fine imposed on the finished goods was found excessive in the circumstances and required reduction, whereas the redemption fine on the raw material could not stand.

Conclusion: The confiscation of the excess finished goods was sustained, the confiscation of the raw material was set aside, and the redemption fine was reduced in respect of the finished goods and set aside in respect of the raw material.

Issue (iii): whether the penalty under section 11AC and the personal penalties on the proprietor and manager were justified, and to what extent.

Analysis: The penalty under section 11AC was considered excessive on the facts and was reduced. The proprietor's liability for contravention of the excise procedure was upheld, but the penalty was scaled down to the prescribed maximum under the relevant rules for each violation. No penalty could be imposed on the manager under rules 9(2), 52A or 226 because the necessary basis for personal liability was not established.

Conclusion: The section 11AC penalty was reduced, the proprietor's penalty was sustained but reduced, and the manager's penalty was set aside.

Final Conclusion: The appeals succeeded only in part, with the vehicle confiscation and the manager's penalty deleted, the confiscation of excess goods substantially maintained, and the monetary penalties and fines modified downward.

Ratio Decidendi: Confiscation of a conveyance requires a showing of knowing involvement or culpable transport of liable goods, while personal penal liability must be specifically established on the facts and cannot be imposed mechanically.

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