Clandestine removal must be supported by evidence; credible intra-premises movement can defeat confiscation, with only token procedural penalty surviving.

Where goods were only shifted within the registered premises and the explanation that the ground floor was being whitewashed and painted was found plausible, confiscation for intended clandestine removal was not justified because no evidence showed mala fide intention or preparation for removal. As the substantive allegation failed, the connected penalties could not survive; however, the intra-premises movement without permission was treated as a procedural lapse, supporting only a token penalty on the appellant.

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Issues: (i) Whether the seized goods kept on the first floor of the registered premises were liable to confiscation on the allegation of intended clandestine removal; (ii) Whether the penalties imposed on the appellant and the connected noticee were sustainable.

Issue (i): Whether the seized goods kept on the first floor of the registered premises were liable to confiscation on the allegation of intended clandestine removal.

Analysis: The goods were found shifted within the premises, and the explanation that the ground floor was being whitewashed and painted was found plausible. There was no evidence showing mala fide intention or preparation for clandestine removal. The absence of statutory records on the day of visit was also explained by the Sunday visit, non-availability of the proprietor, and temporary absence of the person maintaining records. In these circumstances, the benefit of doubt was extended to the appellant.

Conclusion: The confiscation of the seized goods was not justified and was set aside.

Issue (ii): Whether the penalties imposed on the appellant and the connected noticee were sustainable.

Analysis: Since the substantive allegation of clandestine removal was not established, the substantive penalties could not survive. However, shifting the goods to the first floor without permission was treated as a procedural and technical lapse warranting only a token penalty.

Conclusion: The penalties imposed on the appellant and the connected noticee were set aside, and the appellant's penalty was reduced to a token penalty of Rs. 5,000/-.

Final Conclusion: The appeals succeeded in substantial part, with confiscation and major penalties being annulled while only a minor procedural penalty was sustained.

Ratio Decidendi: Where the evidentiary basis for clandestine removal is absent and the explanation for movement of goods within the premises is credible, confiscation and substantive penalties cannot be sustained, though a minor token penalty may be imposed for a procedural breach.

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