Undisclosed material and failure to prove attempted export meant customs confiscation of the truck and penalty could not stand.

Confiscation of a truck under customs law required proof that it was used in an attempt to export goods contrary to law. The adjudicating authority relied on undisclosed seizure materials and confessional statements not set out in the show-cause notice, depriving the noticee of a fair opportunity to meet the case. On the evidence, the department failed to establish that the truck was used for transport to Nepal, so confiscation was not sustainable. Because penalty under customs law depended on proof of conduct rendering the goods liable to confiscation, and that foundation was not proved, the penalty against the truck owner also failed.

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Issues: (i) Whether the truck was liable to confiscation on the ground that it was used for attempted illegal export of goods to Nepal. (ii) Whether the penalty imposed on the truck owner under customs law was sustainable.

Issue (i): Whether the truck was liable to confiscation on the ground that it was used for attempted illegal export of goods to Nepal.

Analysis: Confiscation of a conveyance under the Customs Act requires proof that it was used in an attempt to export goods contrary to law. The adjudicating authority relied on materials such as seizure reports and confessional statements, but those materials were not disclosed in the show-cause notice. The notice did not specify the evidentiary basis on which the department sought to establish attempted export, and the appellant was therefore denied a proper opportunity to meet that case. The witnesses produced by the appellant supported the version that the truck was intercepted inside the Indo-Nepal boundary and the consignment note indicated a local destination. On the record, the department did not establish that the truck was used for transport to Nepal.

Conclusion: The confiscation of the truck was not sustainable and was set aside.

Issue (ii): Whether the penalty imposed on the truck owner under customs law was sustainable.

Analysis: Penalty under the Customs Act depended on proof that the appellant had done or omitted to do an act rendering the goods liable to confiscation. Since the attempted export itself was not proved, the foundation for penalty under the Act also failed. The appellant was entitled to the benefit of doubt on the evidence adduced.

Conclusion: The penalty imposed on the appellant was not sustainable and was set aside.

Final Conclusion: The department failed to prove an attempt to export the goods to Nepal, so both confiscation of the truck and the penalty against the appellant could not stand in law.

Ratio Decidendi: An adjudication order cannot rely on undisclosed material beyond the scope of the show-cause notice, and confiscation or penalty under customs law cannot be sustained unless attempted export is proved on the basis of material put to the notice of the person proceeded against.

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