Contemporaneous reason to believe is essential for seizure; later investigation cannot cure an unlawful confiscation and penalty.

Seizure of excisable goods requires a contemporaneous, tangible reason to believe that the goods are liable to confiscation at the time of seizure. Later investigation or statements cannot retrospectively justify an earlier seizure. On the facts described, the goods were fully accounted for and lying in the factory, while the dutiability of the product had not yet been finally determined. The departmental action was therefore premature, and the seizure was held to be not in accordance with law; the confiscation and penalty could not be sustained.

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Issues: Whether the seizure of the goods and the consequential confiscation and penalty were lawful when the excisability and duty liability of the product had not been finally determined and the officers lacked a contemporaneous basis for reasonable belief at the time of seizure.

Analysis: The power to seize goods is a serious restraint and must rest on a clear and tangible reason to believe that the goods are liable to confiscation at the time of seizure. Information obtained later cannot retrospectively justify an earlier seizure. On the facts, the goods were fully accounted for, were lying in the factory, and the record did not show any contemporaneous basis for treating them as liable to seizure on the date of the raid. The issue whether the product was dutiable was itself still unsettled, so the alleged use or non-use of power was only a secondary question at that stage. The subsequent investigations and statements could not validate the earlier seizure. The departmental action was therefore premature.

Conclusion: The seizure was not in accordance with law, and the confiscation and penalty could not be sustained; the finding is in favour of the assessee.

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