Judgment :- 1. One C. S. Pillai transported 108 bags of tobacco under a transport permit T. P.1-599495, dated 3rd October 1961. On 15th December 1961, the Superintendent of Central Excise visited the licensed premises of the respondent, and checked the stock of the tobacco in the said premises with the connected transport permits of the goods. It was noticed that the respondent had received the 108 bags of tobacco transported by C. S. Pillai under the permit above noticed. On checking up the permit with the parent documents, it was noticed (1) that there was no mention in the parent documents of the rate of duty as Rs. 2.20+44 nP. whereas the same was so mentioned in the permit; and (2) that the description of tobacco in the parent documents was only as stems Kandi and stalk Barado; whereas the description in the permit was Biri tobacco mixture. 2. On the above facts, a show cause notice was issued to Sri C. S. Pillai for contravention of R.32 (1) of the Central Excise Rules, 1944 (hereinafter referred to as the rules). A show cause notice, copy produced as Ex. P-1, was issued, to the respondent for confiscation of the tobacco under R.32(2) and 40 of the Rules, read with S.168 of the Sea Customs Act, 1878, made applicable to the Rules by Government of India Notification under 69/59, dated 18th July 1959. The tobacco which had been seized was provisionally released to the respondent on executing a bond and furnishing a cash security of Rs. 2,000. 3. The respondent submitted his explanation to the show cause notice, & thereafter, the appellant by proceedings evidenced by Ex. P-6 adjudged the tobacco and the bags in which they were contained as liable to confiscation under R.32(2) and R.40 of the rules, read with S.168 of the Sea Customs Act. The respondent was directed to produce the tobacco and on failure to do so, the order Ex. P-6 directed that the security deposit of Rs. 2,000 was to be appropriated towards fine in lieu of confiscation of the goods. The respondent was also directed to pay duty at the higher rate on tobacco brought to his premises under T. I. 1-599495. dated 3rd October 1961, a portion of which was found in the tobacco seized from the premises. The respondent filed O. P. No. 391 of 1963 to quash the above order. The respondent was also directed to pay duty at the higher rate on tobacco brought to his premises under T. I. 1-599495. dated 3rd October 1961, a portion of which was found in the tobacco seized from the premises. The respondent filed O. P. No. 391 of 1963 to quash the above order. Our learned brother (Govindan Nair, J.) allowed the O. P. with costs, and quashed Ex. P-6, Hence this appeal. 4. The learned judge has stated in his judgment that the order Ex. P-6 was not sought to be supported on the basis of R.40, and arguments before our learned brother proceeded only on the basis of R.32 (2). No arguments were addressed to sustain the order on the terms of the bond. The learned judge held that R.32 did not enable the appellant to pass an order in rem, or order the confiscation of goods belonging to a person, who had not contravened the conditions mentioned in the rule. 5. Before us, counsel for the appellant urged that the confiscation was based on R.32(2) and R.40 of the Rules, and besides, on the provisions of S.168 of the Sea Customs Act, 1878. 6. Argument based on S.168 of the Sea Customs Act, 1878 can easily be disposed of. The said section reads as follows: "168. The confiscation of any goods under this Act includes any package in which they are found, and all the other contents thereof. Every vessel, cart or other means of conveyance, and every horse or other animal, used in the removal of any goods liable to confiscation under this Act shall in like manner be liable to confiscation. The confiscation of any vessel under this Act includes her tackle, apparel and furniture." 7. We have examined Notification No. 69/59, by which the above section was adapted for Central Excise adjudications. We are satisfied that neither the section nor the notification by which it was adapted confers any independent power of confiscation of goods. They confer only an ancillary power to confiscate packages, receptacles, etc. connected with the goods. The section and the notification which adapted the same, have no application. 8. R.32 (1) and (2) of the Rules reads as follows: "32. They confer only an ancillary power to confiscate packages, receptacles, etc. connected with the goods. The section and the notification which adapted the same, have no application. 8. R.32 (1) and (2) of the Rules reads as follows: "32. Tobacco not to be carried except under transport document: (1) Except for tobacco in a green state and except for small quantities of cured tobacco not exceeding in weight two standard seers for personal or domestic use, (a) no unmanufactured tobacco shall be carried or transported without a valid permit in the proper form signed by an officer or a certificate in the proper form signed by the carer, a licensed broker or commission agent or the wholesale dealer to whose permises it is to be carried or transported: Provided that duty-paid tobacco may be carried or transported from the premises of a licensed wholesale dealer to the premises of another licensed wholesale dealer under cover of a sale note issued by the consignor, subject to such limitations and such other conditions as the Central Board of Revenue may by order in writing impose; (6) no unmanufactured tobacco shall except in special circumstances, where the Collector by written order otherwise directs be carried or transported by rail, motor vehicle river or canal without a valid permit in the proper form signed by an officer. (2) If any person, (a) carries or transports such tobacco without a valid permit, certificate or sale note, or (6) while carrying or transporting such tobacco, does not, on request by an officer, forth with produce a valid permit or certificate or sale-note, as the case may be, or (c) enters any particulars in the certificate or sale-note in respect of any such tobacco, which are, or which he has reason to believe to be false, he shall be liable to a penalty not exceeding one thousand rupees, and the tobacco in respect of which the offence is committed shall be liable to confiscation." 9. We are clear on a reading of R.32(2) that it penalises a person who transports without a valid permit or does any of the other things contemplated by clauses (b) and (c) of the rules, and further provides that the tobacco in respect of which the penalty mentioned by clauses (a) to (c) of the said rule is committed, is liable to confiscation. We feel that the power of confiscation can be exercised only during the currency of the transport, i. e., while the goods still remain in the dominion and control of the transporter. Once transport had ceased, and the goods have come to rest in the premises of the consignee and pass into his ownership, the power of confiscation under R.32(2) is unavailable. 10. It was argued by counsel for appellant that the confiscation is in respect of the goods, and once the goods have been transported in violation of the rules, the tainted goods can be followed in the hands of any person, even after the transport has ceased. The content and purpose of R.32(2) seems to us to militate against this construction. There is, besides, R.40 of the rules which punishes the receiver of the goods otherwise than under a valid permit, and directs a confiscation of the goods for contravention of the rule. If, as contended, the power of confiscation directed by R.32, would enure beyond the transport of the goods and be available against anyone who has come by the goods, it seems to us, the provision for confiscation under R.40 would be superfluous. 11. The language of R.32(2) may usefully be contrasted with the provisions of S.167, clause (8) of the Sea Customs Act, 1878. The latter provision clearly emphasises that the dominant idea of the penal provision is the goods, wherever they are, and the person guilty of the contravention assumes only a subordinate role in the provision. We are therefore of the view, that R.32 of the rules has no application to the instant case and its invocation by Ex. P-6 was unjustified. 12. R.40 of the Central Excise and Salt Rules runs as follows: "Wholesale purchaser may not receive unmanufactured tobacco or other unmanufactured products except under permit showing payment of duty. We are therefore of the view, that R.32 of the rules has no application to the instant case and its invocation by Ex. P-6 was unjustified. 12. R.40 of the Central Excise and Salt Rules runs as follows: "Wholesale purchaser may not receive unmanufactured tobacco or other unmanufactured products except under permit showing payment of duty. Except as provided in the proviso to clause (a) of sub-rule (1) of R.32 and in R.171 no wholesale purchaser of unmanufactured tobacco for the purpose of trade or manufacture & no wholesale purchaser of other unmanufactured products from a career shall receive into any part of his premises or into his custody or possession, any unmanufactured tobacco or other unmanufactured products, other than tobacco or other unmanufactured products imported from a foreign country, otherwise than under a valid permit granted by an Officer showing that the proper duty has been paid; & every such wholesale purchaser who receives or has in his custody or possession any such goods, in contravention of this rule, shall, in respect of every such offence, be liable to pay the duty leviable on such goods, and to a penalty which may extend to two thousand rupees, and the goods shall also be liable to confiscation." 13. It is admitted that the receipt by the respondent was under a permit. It is further admitted that ex facie the entries in the permit had been correctly filled up and disclosed nothing to alert the respondent, so as to put them on further enquiry. There was no case before us that the permit had not been applied for or obtained by C. S. Pillai. Nor was there any case, either in Ex. P-6, or before us, that it was obtained by fraud. What is alleged for the appellant is that on a comparison of the permit with the parent documents under which it was applied for, there was discrepancy in regard to the quality of the tobacco and the rate of duty payable thereon. Our attention was not called to any provision by which a permit ex facie valid and proper on its entries would cease to be such, by reason of discrepancies on scrutiny with the parent documents. Our attention was not called to any provision by which a permit ex facie valid and proper on its entries would cease to be such, by reason of discrepancies on scrutiny with the parent documents. Nor were we told of any provision under the Act or the rules which require a wholesale purchaser, contemplated by R.40 to check up the permit with the parent documents of the consignor or transporter. In these circumstances, we are unable to hold that R.40 is attracted to the case. 14. The appeal is without merits and is dismissed with costs. Dismissed.