Clandestine removal not proved: confiscation and penalty on excisable goods found in factory were set aside.

Confiscation of excisable goods and penalty under the Central Excise Rules were held unsustainable where the goods were found inside the factory and there was no reliable proof of clandestine removal. The Revenue did not verify the explanation that the goods were under reconditioning, and there was no material showing that they were removed or about to be removed clandestinely. On these facts, the order-in-original was set aside, and the Revenue's challenge failed.

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Issues: Whether the confiscation of excisable goods and the penalty imposed under the Central Excise Rules were justified when the goods were found within the factory premises and there was no reliable proof of clandestine removal.

Analysis: The goods were found inside the factory and the Revenue did not verify the explanation that they were under process of reconditioning. There was no material indicating that the goods were being removed or were about to be removed clandestinely. In the absence of proof of clandestine removal, the finding of the Commissioner (Appeals) could not be said to be perverse or contrary to law, and the order-in-original confiscating the goods and imposing penalty was not sustainable.

Conclusion: The confiscation and penalty were rightly set aside, and the Revenue's appeal failed.

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