Judgment:
1. The appeal is admitted and taken up for disposal with consent of the departmental representative, the respondent being absent and unrepresented despite notice.
2. Notice issued to Arofine Chemical Industries, the respondent to this appeal, proposed, inter alia, confiscation of 363.5 kgs. of aromatic chemicals that it manufactured. The notice alleged that the goods, which were seized enroute towards from the factory of the assessee to its consignee, have been cleared without payment of duty of the debit that had been made of the duty required to be paid in the personal RG 23 account or the modvat account of the assessee. The notice also alleged some other contraventions including shortage of finished goods and excess of some other variety of such goods. The Assistant Commissioner found to be correct of the allegations in the notice and demanded duty and imposed penalty. He also ordered confiscation of the seized goods with an option to redeem the goods on payment of fine. The assessee appealed this order. The Commissioner (Appeals) found that the removal by the assessee of the 363.5 kgs. of the finished goods without debit of duty to be a technical breach and did not warrant confiscation of goods, relying for this purpose of the contents of the circular No.207/37-M/77-CX, dated 21-9-1978 of the Board. He found that since the goods had been returned to the factory after their seizure, the question of payment of duty did not arise, he therefore set aside the confiscation of these goods and demand for duty. The appeal is against this part of the order.
3. I have heard the departmental representative and read the relevant papers. The respondent is absent and unrepresented and has not filed any submissions.
4. The order of the Assistant Commissioner makes it clear that after the goods were intercepted enroute, they were taken to the assessee's factory to verify the details of duty payment, and in the absence of these details, the goods were seized by the officers and kept for safe custody with the assessee. It is therefore not correct to say that the goods were returned to the factory of the assessee. It is more incorrect to say that the goods were "still lying in the factory", as the Commissioner (Appeals) concludes. The goods were physically removed by the assessee from the factory, seized by the officers thereafter and given to the assessee purely as a temporary custodian in an agent of the department can by no means be said to be goods still lying unattended in the factory. The Commissioner (Appeals)'s order setting aside the demand for duty on this count cannot be sustained.
5. Nor do I find it possible to accept that the circular of the Board would apply to the facts before me. The circular gives an illustration of cases where seized goods were resorted to one in which the assessee has inadvertently failed to enter the particulars in its records. In the case before me not only was that a failure to enter the particulars, but there were shortages and excess, to justify the conclusion arrived at by the officers that there was an intent to remove the goods without payment of duty. There is also no satisfactory explanation by the assessee's representative as to the failure to debit the duty on the goods in question. The Commissioner (Appeals) himself records that the partners of the assessee have accepted their lapse. In this situation, the confiscation of the goods is also justified.
6. I therefore allow the appeal and set aside that part of the order of the Commissioner (Appeals) setting aside the demand of duty on the goods in question, reducing the redemption fine from Rs. 50,000/- to Rs. 20,000/-.