Excess goods in transit: invoiced veneer, shrinkage explanation, and small scale exemption defeated confiscation and penalty.

Excess veneer found in transit was not treated as clandestine removal where the goods were covered by a central excise invoice, the assessee remained eligible for small scale exemption with balance clearances at nil rate, and the quantity variation was plausibly explained by shrinkage after drying under the trade notice. On those facts, no mala fide intention to evade duty was established, so confiscation and penalty were not warranted and the Revenue's challenge failed.

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Issues: Whether confiscation and penalty were justified for excess quantity of veneer found in transit despite coverage under central excise invoice and the assessee being eligible for small scale exemption.

Analysis: The assessee was a small scale unit with substantial balance clearances still available at nil rate of duty under the exemption regime. The excess quantity found in the truck was accompanied by a central excise invoice, and a plausible explanation was offered that the variation arose from shrinkage of veneer after drying in terms of the trade notice. On these facts, no mala fide intention to evade duty or clandestine removal was established.

Conclusion: Confiscation and penalty were not warranted, and the Revenue's challenge failed.

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