Evidentiary burden in excise confiscation: unmarked goods alone cannot justify duty demand without proof of non-payment.

Confiscation and duty demand on seized plywood were examined in light of the absence of markings and the lack of affirmative evidence of non-payment of duty. The analysis notes that reliance on missing gate passes and unmarked goods, without addressing stock records, gate pass records, and the explanation that the plywood was found loose after packages were opened, was treated as mechanical application of the excise rules. The record did not establish that the goods were non-duty paid, so absence of markings alone was insufficient to justify confiscation, redemption fine, or duty liability.

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Issues: Whether the confiscation of plywood and the demand of duty were sustainable in the absence of markings on the goods and in the absence of evidence proving non-payment of duty.

Analysis: The appeal turned on whether the absence of markings on the seized plywood was enough to infer removal without payment of duty. The adjudicating authority had proceeded on assumptions that, because no gate passes were produced and the goods bore no markings, the plywood must have been cleared without duty and was liable to confiscation. The appellate authority found that this approach overlooked the defence that the goods were supported by stock and gate pass records and that the goods were found in loose condition after the packages had been opened. It was held that Rule 51(i)(c) and Rule 51(i)(d) of the Central Excise Rules were being applied mechanically to loose sheets seized from a godown, without addressing the factual defence. The record did not contain evidence establishing that the goods were non-duty paid, and the burden could not be shifted merely because the goods lacked markings. The inference drawn from the absence of markings was treated as unsupported by evidence.

Conclusion: The confiscation, redemption fine, and duty demand were unsustainable and were set aside in favour of the assessee.

Ratio Decidendi: Absence of markings on goods seized from a godown, without affirmative evidence of non-payment of duty, is insufficient to sustain confiscation or duty demand; findings of excise liability must rest on evidence, not assumption.

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