Prompt duty debit and no wilful evasion bar confiscation and penalty under Rule 173Q.

Prompt debit of duty after an omission is detected, coupled with no evidence of deliberate evasion, does not justify confiscation under Rule 173Q; the goods and vehicle were not liable to confiscation. Penalty likewise requires material showing wilful contravention or intent to evade duty, and where the record shows only a corrective debit with no suppression, deletion of penalty is sustainable.

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Issues: (i) Whether the seized goods and vehicle were liable to confiscation for the debit-entry omission in the RG-23A Part II register. (ii) Whether penalty was warranted in the absence of wilful intent to evade duty.

Issue (i): Whether the seized goods and vehicle were liable to confiscation for the debit-entry omission in the RG-23A Part II register.

Analysis: The duty on the clearances had been debited in the register on the same day the omission was pointed out by the officers and well before the show cause notice. The records did not show any conduct suggesting deliberate evasion. In those circumstances, confiscation under Rule 173Q could not be justified.

Conclusion: The goods and vehicle were not liable to confiscation and the assessee's position was upheld.

Issue (ii): Whether penalty was warranted in the absence of wilful intent to evade duty.

Analysis: Penalty requires material showing a deliberate or wilful contravention. The available records showed only a corrective debit made after the omission was noticed, with no evidence of wilful suppression or intent to evade duty. The lower appellate authority's deletion of penalty was therefore sustainable.

Conclusion: Penalty was not imposable and the deletion of penalty was upheld.

Final Conclusion: The appeal failed on merits, as neither confiscation nor penalty was justified on the facts found.

Ratio Decidendi: Where duty is promptly debited after the omission is detected and the record does not disclose wilful intent to evade duty, confiscation and penalty under Rule 173Q are not sustainable.

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