Detention under Central Excise rules upheld where alleged lease and transfer of possession lacked proof and were treated as afterthought.

Detention of plant, machinery and factory premises under Rule 230 of the Central Excise Rules, 1944 was sustained because the alleged lease arrangement and surrender of possession were not disclosed to the revenue authorities at the relevant stage, and no documentary proof of transfer back of possession or ownership was produced. The Court treated the claimed lease as a bona fide afterthought devised to avoid the earlier detention order. On that basis, the consequential refusal to grant licence also disclosed no legal infirmity and was upheld.

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Issues: Whether the detention of the plant, machinery and factory premises, and the consequential refusal to grant licence to the appellant, were valid despite the appellant's claim of a prior lease expiry and transfer back of possession before detention.

Analysis: The appellant and the lessee failed to disclose the alleged lease arrangement and the claimed surrender of possession to the revenue authorities at the relevant stage. No documentary proof of the asserted transfer back of possession or ownership as on the date of detention was produced before the authorities or in the earlier challenge to the detention order. The Court found that the alleged lease arrangement was not bona fide and appeared to be an afterthought devised to circumvent the detention already sustained in earlier proceedings. On the materials, the detention ordered under Rule 230 of the Central Excise Rules, 1944 and the consequential action of the department disclosed no legal infirmity.

Conclusion: The detention and the related refusal to grant licence were upheld, and the appellant's challenge failed.

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