Confiscation of duty-evaded excisable goods can follow the goods, with jurisdiction tied to the place of manufacture.

Excisable goods removed without payment of duty and without the prescribed gate-pass remain liable to confiscation even when found with a third-party purchaser, because the confiscatory consequence attaches to the goods themselves. The commentary also notes that seizure and confiscation could be supported through the customs confiscation machinery applied by notification under the Central Excises and Salt Act, rather than resting on excise rules alone. It further states that jurisdiction to enquire lay with the authority connected to the place of manufacture, since the excise infringement occurred there and not merely where the goods were physically seized.

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Issues: (i) Whether excisable goods removed without payment of duty and without the prescribed gate-pass were liable to confiscation even when found in the possession of a third-party purchaser; (ii) whether seizure and confiscation could be sustained by resort to Section 110 of the Customs Act under the notification issued under Section 12 of the Central Excises and Salt Act, 1944; (iii) whether the Assistant Collector at Sivakasi had jurisdiction to proceed with the enquiry though the goods were seized at Hyderabad.

Issue (i): Whether excisable goods removed without payment of duty and without the prescribed gate-pass were liable to confiscation even when found in the possession of a third-party purchaser.

Analysis: Rule 9 of the Central Excise Rules, 1944 prohibits removal of excisable goods from the place of manufacture until duty is paid, and Rules 52 and 52-A require payment and clearance under the prescribed procedure, including a gate-pass. Sub-rule (2) of Rule 9 makes goods removed in contravention of sub-rule (1) liable to duty, penalty and confiscation. The confiscatory consequence attaches to the goods themselves and is not confined to the manufacturer's possession; therefore, the fact that the goods were with a purchaser did not bar confiscation.

Conclusion: The goods were liable to confiscation even in the hands of the petitioner, and this contention failed against the petitioner.

Issue (ii): Whether seizure and confiscation could be sustained by resort to Section 110 of the Customs Act under the notification issued under Section 12 of the Central Excises and Salt Act, 1944.

Analysis: The power of confiscation and allied procedure was supported by the statutory notification mechanism under Section 12 of the Central Excises and Salt Act, 1944, by which provisions relating to penalties and confiscation under the customs law were made applicable to excise duty matters. On that basis, the seizure was held to be traceable to Section 110 of the Customs Act and not dependent on Rule 173Q alone.

Conclusion: The seizure was validly supported by the customs confiscation machinery as applied through Section 12 of the Central Excises and Salt Act, 1944, and the petitioner's objection was rejected.

Issue (iii): Whether the Assistant Collector at Sivakasi had jurisdiction to proceed with the enquiry though the goods were seized at Hyderabad.

Analysis: The relevant offence was the non-payment of excise duty at the place of manufacture, and the place of manufacture was Sivakasi. Jurisdiction was therefore connected with the place where the excise infringement occurred, not merely with the place of physical seizure.

Conclusion: The Assistant Collector at Sivakasi had jurisdiction to enquire into the matter, and this objection was rejected.

Final Conclusion: The writ petition was dismissed because none of the challenges to confiscation, seizure or jurisdiction succeeded, leaving the respondents entitled to proceed with the enquiry.

Ratio Decidendi: Excisable goods removed in contravention of the duty-payment and gate-pass requirements remain liable to confiscation wherever found, and jurisdiction may be exercised by the authority connected with the place of manufacture where the excise infringement occurred.

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