Seized goods security must match the maximum penalty for the specific breach, not an inapplicable penalty provision.

Security for release of seized goods under section 13-A(6) must be fixed with reference to the maximum penalty legally recoverable for the specific breach alleged. Where the breach is failure to maintain proper accounts relating to the goods, falling within clause (d) of section 15-A(1), the relevant penalty provision is clause (ii), which prescribes a penalty range of not less than fifty per cent and not more than one and a half times the tax sought to be avoided. A penalty under clause (ix), applicable only to cases covered by clauses (o) or (q), cannot be used where those clauses are not attracted. Security fixed by reference to an inapplicable penalty provision is not justified and must be redetermined.

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Issues: Whether, on the facts found, security for release of seized goods under section 13-A(6) could be fixed at forty per cent of the value of the goods, or whether it had to be confined to the maximum penalty that could lawfully be imposed for the alleged breach.

Analysis: Security under section 13-A(6) is intended to safeguard recovery of the penalty that may ultimately be imposed in connection with the seized goods. The breach disclosed in the order was the failure to maintain proper accounts in relation to the goods, which falls within clause (d) of section 15-A(1). For such a breach, clause (ii) of section 15-A(1) applies, under which the penalty range is not less than fifty per cent and not more than one and one half times the amount of tax sought to be avoided. The penalty contemplated by clause (ix) of section 15-A(1), which applies only to cases covered by clauses (o) or (q), was not attracted on the material before the Authority.

Conclusion: The demand for security at forty per cent of the value of the goods was not justified; the security had to be determined afresh with reference to the maximum penalty legally recoverable for the alleged breach.

Final Conclusion: The seizure-related security condition was interfered with and the matter was sent back for redetermination of the amount of security in accordance with law.

Ratio Decidendi: Security required for release of seized goods must be linked to the maximum penalty applicable to the specific statutory breach established or alleged, and cannot be fixed by reference to an inapplicable penalty provision.

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