Clandestine removal and confiscation of unrecorded fabrics sustained, with partial relief on redemption fine and personal penalty.

Unentered processed fabrics found in statutory records, supported by contemporaneous statements and unretracted evidence, were treated as intended for clandestine clearance and therefore liable to confiscation. The explanation that they represented one day's production failed because no material showed manufacturing capacity, prior RG-1 accounting, or proper raw material entry. Confiscation was sustained. On sanctions, the redemption fine was reduced in view of the goods' value, the company's penalty was left unchanged, and the personal penalty on the authorised signatory was reduced.

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Issues: (i) Whether the seized processed fabrics were rightly confiscated as goods intended for clandestine removal; (ii) whether the redemption fine and penalties required modification.

Issue (i): Whether the seized processed fabrics were rightly confiscated as goods intended for clandestine removal.

Analysis: The statements recorded from the appellant's representatives and the surrounding circumstances showed that the fabrics were not entered in the statutory records and were intended to be cleared without payment of duty. The explanation that the goods represented the day's production was not supported by any material showing capacity to manufacture such quantity in one day, prior accounting in RG-1, or proper entry of raw materials. The contemporaneous statements were also not retracted.

Conclusion: The confiscation was upheld and was not disturbed.

Issue (ii): Whether the redemption fine and penalties required modification.

Analysis: Although confiscation was sustained, the value of the seized goods was around Rs. 5 lakhs, which justified some reduction in the redemption fine. The penalty on the company was already at a low level and required no further interference, while the personal penalty on the authorised signatory warranted reduction.

Conclusion: The redemption fine was reduced from Rs. 1 lakh to Rs. 75,000, the company's penalty was maintained, and the personal penalty was reduced from Rs. 50,000 to Rs. 25,000.

Final Conclusion: The order was sustained on confiscation and duty-related consequences, but the monetary sanctions were modified in part, resulting in only a partial relief to the appellants.

Ratio Decidendi: Goods shown by contemporaneous statements and unretracted evidence to have been kept the statutory records for intended clandestine clearance are liable to confiscation, while the quantum of redemption fine and penalty may be moderated on the facts of the case.

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