Provisional release does not bar confiscation, and Settlement Commission immunity does not automatically extend to redemption fine.

Provisional release of seized goods on bond and bank guarantee did not bar confiscation, because confiscation proceedings under a separate show cause notice remained maintainable. Settlement Commission relief under Section 32F, Central Excise Act, 1944, granted immunity only from penalty and prosecution and did not extend to redemption fine unless specifically stated. The finding that the goods were unavailable for confiscation was rejected. Confiscation was upheld, while the redemption fine was reduced.

---

---

Issues: Whether goods seized from the godown were liable to confiscation and whether the redemption fine could be set aside on the ground that the duty demand on the same goods had been settled by the Settlement Commission and the goods were not available for confiscation.

Analysis: The seized goods were found to have been cleared from the factory without payment of duty and the duty liability on those very goods formed part of the demand settled under the Settlement Commission order under Section 32F of the Central Excise Act, 1944. However, the settlement granted immunity only from penalty and prosecution and did not grant immunity from redemption fine. The finding that the goods could not be confiscated because they were not available was rejected, since the record showed provisional release of the goods on bond and bank guarantee. Provisional release does not prevent confiscation, and the confiscation proceedings arising from the separate show cause notice were maintainable.

Conclusion: The order setting aside confiscation and redemption fine was unsustainable. Confiscation was upheld, while the redemption fine was reduced from Rs. 1 lakh to Rs. 25,000/-.

Ratio Decidendi: Provisional release of seized goods does not bar confiscation, and immunity granted by the Settlement Commission from penalty and prosecution does not extend to redemption fine unless specifically granted.

---