Procedural lapse without intent to evade duty cannot sustain confiscation, redemption fine or penalty under excise rules.

Penalty and confiscation under Rule 173Q(1)(d) were held unsustainable where excisable goods were cleared without a prior PLA debit but the record showed sufficient PLA balance and no intent to evade duty. The lapse was treated as procedural and bona fide, not deliberate; since the rule applies only where contravention is accompanied by intent to evade payment of duty, a technical or venial breach could not justify quasi-criminal penalty. Confiscation, redemption fine and penalty were therefore set aside in favour of the assessee.

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Issues: Whether confiscation of goods, redemption fine and penalty were sustainable when the removal of excisable goods occurred without prior PLA debit but without intent to evade duty.

Analysis: The appellant acknowledged a procedural lapse in not making the corresponding PLA entry, but the record showed sufficient balance in the PLA and no motive to evade duty. The adjudicating authority itself had found absence of intent to evade. Rule 173Q(1)(d) attracted penalty only where contravention was with intent to evade payment of duty. Penalty proceedings being quasi-criminal in nature, a technical or venial breach, or a bona fide mistake, does not justify penalty in the absence of mens rea. On the facts, the contravention was only procedural and not deliberate.

Conclusion: Confiscation, redemption fine and penalty were unsustainable and were set aside in favour of the assessee.

Ratio Decidendi: Penalty and confiscation under Rule 173Q(1)(d) of the Central Excise Rules, 1944 cannot be sustained for a mere procedural lapse unless the contravention is accompanied by intent to evade duty.

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