Duty-paid goods returned for rebalancing were not treated as fresh removal, so confiscation and penalty failed.

Confiscation of a crane and penalty under the Central Excise Rules, 1944 were held unsustainable where the same duty-paid consignment, covered by a gate pass, had been taken back to the factory for rebalancing and then removed again the next day. The accepted finding was that there was no second consignment or double transport under the same gate pass, so the later movement was not a fresh removal in breach of Rule 52A. On those facts, the provisions governing retention and return of duty-paid goods were not attracted, and the absence of immediate intimation did not justify penal consequences.

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Issues: Whether confiscation of the crane and imposition of penalty under the Central Excise Rules, 1944 were justified when the same duty-paid consignment, after being taken out under a gate pass, was brought back to the factory for rebalancing and subsequently removed the next day.

Analysis: The accepted factual finding was that the seized crane was covered by Gate Pass No. 64 and that there was no evidence of a second consignment or of double transport under the same gate pass. Once the return of the same duty-paid goods to the factory for adjustment of imbalance was accepted, the later movement could not be treated as a fresh removal in breach of Rule 52A. In such circumstances, the object of the provisions dealing with retention and return of duty-paid goods was not attracted, and the absence of immediate intimation, in the facts found, did not justify penal consequences.

Conclusion: Confiscation and penalty were not sustainable.

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