Excise penalty must be proportionate to the contravention, even where removal without a gate pass is upheld.

Removal of excisable goods without a gate pass was treated as a valid contravention because, even where goods were allegedly taken out only for weighing, some gate pass particulars should have been prepared before removal. The finding of breach was maintained, but the penalty and redemption fine were reduced because excise sanctions must bear a reasonable relationship to the gravity of the offence and the duty involved. The appeal succeeded only to that extent, with the penalty reduced to Rs. 20,000 and the redemption fine to Rs. 15,000.

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Issues: Whether removal of goods without a gate pass justified the demand of duty-related penalties and whether the quantum of penalty and redemption fine required reduction.

Analysis: The truck was intercepted outside the factory without a gate pass. Even if the goods were sent out only for weighing, some gate pass particulars ought to have been prepared before removal. On merits, the allegation of removal without proper cover was sustained. However, the penalty had to bear a reasonable relationship to the gravity of the offence and the duty involved, and an excessive penalty was not warranted in the facts.

Conclusion: The finding on the contravention was maintained, but the penalty was reduced to Rs. 20,000 and the redemption fine to Rs. 15,000.

Final Conclusion: The appeal succeeded only to the extent of reduction of the penalty and redemption fine, and was otherwise rejected.

Ratio Decidendi: Penalty and redemption fine in excise matters must be commensurate with the gravity of the contravention and the duty involved.

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