Clandestine removal of duty-free goods can justify confiscation, redemption fine, and penalty despite provisional release.

Goods removed clandestinely without payment of duty remained liable to confiscation and redemption fine because the invoices were found to camouflage removal and the excess stock was admitted as unaccounted. Provisional release of the goods did not bar imposition of redemption fine where confiscation was otherwise justified. The penalty was also sustained because the non-payment of duty was treated as intentional clandestine removal, and duty was paid only after detection by officers. The commentary thus states that deliberate evasion supports both confiscation-related consequences and penal action.

---

---

Issues: (i) Whether the goods removed from the factory and the excess stock found in the premises were liable to confiscation and redemption fine. (ii) Whether the penalty imposed on the assessee was sustainable.

Issue (i): Whether the goods removed from the factory and the excess stock found in the premises were liable to confiscation and redemption fine.

Analysis: The goods were found to have been removed without payment of duty, and the invoices were held to have been used only to camouflage the removal. The excess stock in the factory was admitted to be unaccounted, and the provisional release of goods did not take away the power to impose redemption fine where the goods were liable to confiscation.

Conclusion: The confiscation of the goods and the redemption fine were justified and the assessee's challenge failed.

Issue (ii): Whether the penalty imposed on the assessee was sustainable.

Analysis: The non-payment of duty was not treated as a mere procedural lapse, but as part of intentional clandestine removal. Duty was paid only after detection by the officers, so the case did not attract the relief sought by the assessee against penalty.

Conclusion: The penalty was rightly upheld against the assessee.

Final Conclusion: The assessee failed on the substantive challenge, while the Revenue succeeded in restoring confiscation and redemption fine and in sustaining the penalty.

Ratio Decidendi: Goods removed clandestinely without payment of duty remain liable to confiscation and redemption fine, and provisional release does not bar such fine; intentional evasion also sustains penalty.

---