Confiscation requires proved evasion and proper notice to the vehicle owner; record-keeping lapses alone are insufficient.

Non-debit of duty and failure to make proper RG-I entries, by themselves, did not justify confiscation where proved intent to evade duty was absent. On the facts noted, supplies were to Government departments and sufficient credit balance existed to cover duty, so the lapse was treated as an irregularity warranting only a reduced penalty for defective record-keeping. Confiscation of goods seized in transit and of the truck was also unsustainable because confiscation cannot exceed the scope of the show-cause notice and the owner of the conveyance must be duly noticed before confiscation is ordered. The transit confiscation, vehicle confiscation, and related redemption fine were therefore set aside.

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Issues: (i) Whether non-debit of duty and non-entry in statutory records for goods cleared from the factory justified confiscation of the factory-seized goods and full penalty; (ii) Whether confiscation of goods seized in transit and the truck, with redemption fine, was sustainable in the absence of a proper notice to confiscate the goods and notice to the owner of the conveyance.

Issue (i): Whether non-debit of duty and non-entry in statutory records for goods cleared from the factory justified confiscation of the factory-seized goods and full penalty.

Analysis: Daily RG-I maintenance was mandatory, but a mere lapse in entries did not by itself establish clandestine removal. The decisive question was whether there was intent to evade duty. On the facts found, the supplies were to Government departments, sufficient credit balance was available to meet the duty on the invoices, and the non-debit was treated as an irregularity rather than a deliberate attempt to evade duty. Such non-accountal could attract a penalty for improper maintenance of records, but not confiscation under the confiscatory provision in the absence of proved evasion.

Conclusion: Confiscation of the goods seized from the factory was set aside, and the penalty was reduced substantially to the extent justified for the record-keeping lapse.

Issue (ii): Whether confiscation of goods seized in transit and the truck, with redemption fine, was sustainable in the absence of a proper notice to confiscate the goods and notice to the owner of the conveyance.

Analysis: Confiscation could not travel beyond the scope of the show-cause notice. Where confiscation of the truck was ordered, notice to the owner of the conveyance was required as a condition precedent. The record did not establish that the owner had been duly proceeded against for confiscation of the conveyance, and the joint redemption fine for goods and vehicle was therefore unsustainable. On the same reasoning, confiscation of the transit goods could not be upheld when it was not properly proposed in the notice.

Conclusion: Confiscation of the transit goods and the truck, and the related redemption fine, were set aside.

Final Conclusion: The appeal succeeded in part: confiscation-related relief was granted, the penalty was brought down, and the remaining order was disturbed only to the extent inconsistent with the findings above.

Ratio Decidendi: Confiscation for non-accountal under the excise control provisions requires proved intent to evade duty, and confiscation of a conveyance cannot be sustained without a proper notice to the owner.

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