Specific notice for personal penalty is required; duty demand and confiscation stood where evasion was proved.

Personal penalty proceedings require a specific show cause notice clearly proposing penalty against the concerned partners and giving them a fair chance to answer; where the notice is directed mainly to the firm and does not clearly allege individual liability, the penalties are not sustainable and are set aside. By contrast, where removal of excisable goods without payment of duty is supported by evidence such as forged gate passes, absence of statutory entries, and transportation of contraband goods, the duty demand and confiscation of the goods and truck may be upheld. On the facts recorded, the personal penalties failed, but the duty liability and confiscation were maintained.

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Issues: (i) Whether the penalties imposed on the partners could be sustained in the absence of a specific show cause notice proposing personal penalty; (ii) Whether the confiscation of the truck and the duty demand could be sustained.

Issue (i): Whether the penalties imposed on the partners could be sustained in the absence of a specific show cause notice proposing personal penalty.

Analysis: The show cause notice primarily called upon the firm to answer the proposed action. The record showed that the partners were named in the notice and had replied, but the body of the notice did not clearly and specifically propose penalty against them in their individual capacities. Penalty proceedings being quasi-criminal in nature, a person sought to be penalised must be specifically informed of the charge and given an effective opportunity to meet it. The absence of a clear personal charge was treated as a serious defect affecting the validity of the penalty proceedings.

Conclusion: The penalties on the partners were not sustainable and were set aside.

Issue (ii): Whether the confiscation of the truck and the duty demand could be sustained.

Analysis: The evidence of removal of excisable goods without payment of duty, use of unauthorised and forged gate passes, and non-entry of goods in statutory records was accepted. The duty demand and confiscation of goods were not successfully displaced. As regards the truck, the majority found no sufficient basis to interfere with confiscation in view of its use for transportation of contraband goods and the surrounding evidence of evasion.

Conclusion: The duty demand and confiscation of the goods and truck were upheld.

Final Conclusion: The appeal succeeded only in part: the duty liability and confiscation were maintained, but the personal penalties were annulled.

Ratio Decidendi: A personal penalty cannot be sustained unless the notice specifically proposes such penalty against the concerned and affords a clear opportunity to answer it, while confiscation and duty demand may stand where evasion is proved on the evidence.

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