Clandestine removal proved by missing invoice and transit mismatch; duty upheld on full quantity, but redemption fine reduced.
Goods found in transit without matching documents were treated as clandestinely removed, so duty was upheld on the entire quantity found in the tempo. The earlier payment of duty on a smaller quantity did not affect liability for the goods actually removed without a valid invoice. The redemption fine was examined for reasonableness and found on the higher side, so it was reduced; confiscation of the vehicle and the related fine were sustained because ownership of the vehicle was not shown.
Issues: (i) Whether the goods were clandestinely removed and duty was payable on the entire quantity found in the tempo; (ii) whether the redemption fine imposed on confiscated goods and the vehicle was excessive.
Issue (i): Whether the goods were clandestinely removed and duty was payable on the entire quantity found in the tempo.
Analysis: The goods were found in transit without supporting documents matching the vehicle particulars and quantity. The driver's statement, the seizure proceedings, and the surrounding circumstances supported the conclusion that the removal was not covered by a proper invoice and was clandestine. The fact that duty had allegedly been paid on a smaller quantity at some earlier stage did not affect liability for the quantity actually found being removed without invoice.
Conclusion: The duty demand on the entire quantity found was upheld against the assessee.
Issue (ii): Whether the redemption fine imposed on confiscated goods and the vehicle was excessive.
Analysis: Though the authority had discretion to impose redemption fine in lieu of confiscation, that discretion had to be exercised reasonably and not arbitrarily. Considering the value of the goods, the duty involved, and the surrounding circumstances, the fine of one lakh rupees was found to be on the higher side. The grievance regarding confiscation of the vehicle was rejected because the appellant was not shown to be the owner of the vehicle.
Conclusion: The redemption fine on the goods was reduced, while the confiscation of the vehicle and the fine relating to it were sustained.
Final Conclusion: The appeal failed on the substantive findings of clandestine removal and confiscation, but partial relief was granted by reducing the redemption fine on the goods.
Ratio Decidendi: Where excisable goods are found being removed without a valid supporting invoice in circumstances indicating clandestine removal, duty is chargeable on the entire quantity found, and redemption fine in lieu of confiscation must be fixed by a judicious exercise of discretion having regard to the value of goods and attendant circumstances.
TaxTMI 
AI Drafter ✕
TaxTMI 
