Non-maintenance of simplified records alone does not justify confiscation; penalty must be limited to a reasonable amount.

Where the only established lapse was non-maintenance of the prescribed simplified accounts, and there was no allegation or finding of duty evasion or clandestine removal, confiscation of raw materials, semi-finished goods and finished goods was not justified. The redemption fine was therefore set aside. The admitted record-keeping failure could still attract penalty, but only at a reasonable level, so the penalty was reduced to a nominal amount.

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Issues: Whether confiscation of raw materials, semi-finished goods and finished goods, along with redemption fine and penalty, was justified where the only allegation was non-maintenance of simplified accounts.

Analysis: The proceedings did not allege evasion of duty or clandestine removal. The notice proceeded only on non-maintenance of the simplified statutory account. In the absence of such substantive allegations, confiscation of the goods, especially raw materials and semi-finished goods, was found unwarranted. At the same time, the admitted failure to maintain the simplified account justified imposition of a nominal penalty rather than the higher penalty originally imposed.

Conclusion: Confiscation and redemption fine were set aside, and the penalty was reduced to Rs. 2,000/-.

Ratio Decidendi: Where the only proven lapse is non-maintenance of prescribed simplified records and there is no allegation or finding of duty evasion or clandestine removal, confiscation of goods is not justified and penalty must be confined to a reasonable amount.

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