Transit seizure under Central Excise Rules cannot support confiscation or penalty against persons outside the rule's covered categories.

Rule 25 of the Central Excise Rules could not be invoked to confiscate goods seized in transit where the appellants were neither manufacturers, registered dealers nor warehouse owners, and the goods were not shown to have been cleared from an identified factory without payment of duty. As confiscation itself was unsustainable, the consequential penalty under Rule 26 also failed. On the same reasoning, confiscation of the vehicles carrying the goods and any redemption fine in respect of the goods or vehicles was equally unsustainable. The impugned order was set aside and the appeals were allowed with consequential relief.

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Issues: Whether goods and vehicles seized during transit could be confiscated, and penalties imposed, under Rule 25 and Rule 26 of the Central Excise Rules when the appellants were neither manufacturers, registered dealers, nor owners of a warehouse.

Analysis: The goods were not shown to have been cleared from any identified factory without payment of duty, and the appellants did not fall within the categories of persons against whom Rule 25 could be invoked. Since confiscation of the goods under Rule 25 was not sustainable, the consequential penalty under Rule 26 also could not stand. For the same reason, confiscation of the vehicles carrying the goods, and any redemption fine in respect of the goods or vehicles, was also unsustainable.

Conclusion: The confiscation, penalties, and redemption fine were held not maintainable against the appellants.

Final Conclusion: The impugned order was set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Rule 25 of the Central Excise Rules cannot be applied to confiscate goods from persons who are neither manufacturers, registered dealers, nor warehouse owners, and a penalty under Rule 26 cannot survive when such confiscation itself is not sustainable.

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