Bona fide purchaser protection bars confiscation and redemption fine where excise goods are bought under valid duty documents.

A bona fide purchaser who receives excisable goods under valid Central Excise documents is not liable to confiscation or redemption fine merely because the manufacturer did not properly debit the duty shown in those documents. The buyer had no material knowledge, and no specific contravention attributable to the buyer was established in the show cause notice. On that basis, the confiscation provision was held inapplicable to the buyer, and the redemption fine was not supportable. The principle applied is that an independent purchaser need not verify internal duty debit compliance by the manufacturer when the transaction is supported by regular excise documentation.

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Issues: Whether confiscation of goods and redemption fine imposed on the buyer were sustainable where the goods were purchased under Central Excise documents and the duty payment shown in the documents was not debited in the manufacturer's accounts.

Analysis: The buyer had received the goods against gate passes showing the relevant excise particulars, and there was no material to show that the buyer knew or could have known that the duty shown in the documents had not been properly debited by the manufacturer. The decision proceeded on the principle that a purchaser is not required to ascertain whether excise duty has in fact been paid when the transaction is supported by excise documents. The order also noted that the show cause notice did not establish any specific rule violation by the buyer, and that the rules invoked against the manufacturer did not justify confiscation once the goods had been received by an independent purchaser for consideration. On the facts, the confiscation provision relied upon was not attracted against the buyer, and the redemption fine was not supportable.

Conclusion: Confiscation of the goods and the redemption fine imposed on the buyer were not sustainable.

Final Conclusion: The buyer's appeal succeeded and the confiscation order was set aside.

Ratio Decidendi: A bona fide purchaser who receives excisable goods under valid duty documents cannot be visited with confiscation or redemption fine unless a specific contravention attributable to the purchaser is established.

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