Confiscation of goods cleared unlawfully sustained, but absence of recipient's knowledge justified reduction in redemption fine.

Goods removed in contravention of law remain liable to confiscation under Rule 173Q(1) of the Central Excise Rules, including when found in the hands of the recipient. However, where the recipient lacked knowledge of the non-duty-paid character of the goods, was not involved in the manufacturer's fraud, and had paid the full consideration including the duty component, those circumstances justified a reduced redemption fine. The confiscation was sustained, but the redemption fine was scaled down to a token amount of Rs. 5,000.

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Issues: Whether goods found to have been cleared in contravention of law were liable to confiscation under Rule 173Q(1) of the Central Excise Rules, and whether the redemption fine imposed on the recipient deserved reduction in the absence of knowledge of the fraud.

Analysis: Goods removed in contravention of law are liable to confiscation even in the hands of the recipient. However, where the recipient was not aware of the non-duty-paid character of the goods, was not a party to the manufacturer's fraud, and had paid the full consideration including the duty component, the surrounding circumstances justified leniency in the quantum of redemption fine.

Conclusion: The confiscation was sustained, but the redemption fine was reduced to a token amount of Rs. 5,000.

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