Confiscation of factory stock and related penalties found unsustainable absent duty evasion or clandestine removal.

Confiscation of marble slabs found lying within the factory premises was held unsustainable because Rule 24 was directed at seizure of goods on which duty had not been paid, and the stock could not be treated as liable to confiscation merely for not being reflected in the daily stock account. The Tribunal also found no evidence of mala fide intent or clandestine removal, so the consequential redemption fine and penalties were not justified. A penalty invoked under Section 117 of the Customs Act, 1962 was found inapplicable, and the Revenue appeal was rejected.

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Issues: Whether the confiscation of marble slabs found within the factory premises, along with the consequential redemption fine and penalties, was sustainable.

Analysis: The Tribunal followed an earlier identical decision and noted that the goods were seized while still lying in the factory premises. It was held that Rule 24 was aimed at seizure of goods on which duty had not been paid, and in the facts found there was no basis to treat the stock as liable to confiscation merely because it was not reflected in the daily stock account. The Tribunal also found no evidence of mala fide intent or clandestine removal. The penalty imposed with reference to Section 117 of the Customs Act, 1962 was also held to be inapplicable.

Conclusion: The confiscation and penalties were not justified, and the Revenue appeal was rejected.

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