Duty-paying documents and no intent to evade duty barred confiscation, with penalty and interest also set aside.

Where duty-paying documents were prepared on the same day and produced before investigators, and the record showed fortnightly duty debit without any finding of deliberate suppression or intent to evade duty, the seized goods were treated as duty-discharged and not liable to confiscation. As confiscation could not be sustained, the connected penalty and interest also failed. The trucks were separately held not liable to confiscation because they were neither owned nor possessed by the assessee. The confiscation of goods and vehicles, along with the consequential fiscal consequences, was therefore set aside.

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Issues: Whether the seized goods and the vehicles were liable to confiscation and whether consequential penalty and interest could be sustained.

Analysis: The invoices for the disputed clearances were prepared on the same day and the duty-paying documents were produced before the investigating officers in the first statement. The records also showed fortnightly duty debit, and the impugned order did not record any finding of deliberate suppression of facts with intent to evade duty. On these circumstances, the goods were treated as duty-discharged goods and not liable to confiscation. Since confiscation itself was unsustainable, the consequential penalty and interest could not survive. The trucks were also not liable to confiscation because they were not owned or possessed by the assessee.

Conclusion: Confiscation of the goods and the trucks was set aside, and the penalty and interest were also set aside.

Final Conclusion: The assessee obtained complete relief from confiscation and the connected fiscal consequences, and the revenue challenge to reduction of redemption fine failed.

Ratio Decidendi: Where the record shows preparation of duty-paying documents and no finding of deliberate suppression or intent to evade duty, seized goods cannot be confiscated and the connected penalty and interest also cannot be sustained.

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