JUDGMENT T.C. Raghavan, C.J. 1. The Assistant Collector of Central Excise and the Collector of Customs and Central Excise, the respondents in the writ petition, are the appellants, and the petitioner in the writ petition the respondent. Forty eight bags of coffee seeds, the excise duty on which was not paid, were recovered from the godown of the respondent by the officers of a the Excise Department. These coffee seeds appear to have been transported in a lorry from a curing area by a person named Ibrayi to the godown of the respondent. The Excise Department proceeded against Ibrayi, the driver of the lorry and also against the respondent. The coffee seeds recovered from the godown of the respondent were returned to him taking a bond from him. An amount of Rs. 12,000 was also deposited by him. A similar bond was taken from Ibrayi too. Ultimately, since it was found that the coffee seeds were removed from a curing area by Ibrayi, he and the driver of the lorry were liable for penalty and the lorry was liable to be confiscated. And the Department imposed penalties on both of them and also recovered the price of the lorry from Ibrayi. They also sought to recover from the respondent Rs. 5,000 towards the value of the 48 bags of coffee seeds claiming that the coffee seeds were liable to be confiscated, and Rs. 2,332.12 as the excise duty payable on the coffee seeds. And these amounts were sought to be recovered from the amount of Rs. 12,000 deposited by the respondent. The respondent questioned these recoveries in the writ petition; and the Single Judge who heard the matter allowed the petition. The question we have to consider is whether the order of the Single Judge requires any variation. 2. There are two aspects to the question, one relating to the levy of excise duty and the other relating to the confiscation of the excisable goods. The Department appears to have proceeded under rule 33(2) and rule 9(2) of the Central Excise Rules, 1944. The Central Government Pleader has drawn our attention to rules 9, 19, 24, 27, 29, 31 and 33 of the Rules in particular, to rule 29. The Department appears to have proceeded under rule 33(2) and rule 9(2) of the Central Excise Rules, 1944. The Central Government Pleader has drawn our attention to rules 9, 19, 24, 27, 29, 31 and 33 of the Rules in particular, to rule 29. Rule 9 provides for the time and manner of payment of duty; and sub-rule (1) thereof says that no excisable goods shall be removed from any place where they are produced, cured or manufactured, etc., whether for consumption, export, etc., until the excise duty leviable thereon has been paid. Some provisos are added to this sub-rule, which allow the deposit of the excisable goods in a store-room or other place of storage, etc., without payment of duty, etc. Sub-rule (2) provides that, if any excisable goods are deposited or removed from any place specified above in contravention of sub-rule (1), the producer or manufacturer thereof shall pay the duty leviable on such goods and shall also be liable to penalty which may extend to Rs. 2,000. And the sub-rule provides further that such goods shall be liable to confiscation. Rule 19 provides that duty shall become chargeable as soon as the products have been cured and are in a fit state for sale, etc., and the curer shall be liable for the payment thereof and shall remain so liable until the liability is, to the knowledge and satisfaction of the proper officer, "transferred as provided in rule 29 to another person duly licensed to carry on business in such products ". There is a proviso to this rule with which we are not concerned. Rule 24 provides as to how a curer may dispose of his products. Sub-rule (1) of the rule provides in what manner he can dispose of his goods after they have been cured: they can be cleared on payment of duty; can be deposited in a public warehouse appointed for the storage of such products; can be deposited in a bonded store-room in the curer's own premises; or can be transferred to a wholesale dealer possessing a private warehouse licensed for the storage of such products, etc. Sub-rule (2) of rule 24 makes provision that the curer shall not sell the products wholesale "except to a person duly licensed under these Rules to carry on business in such products or to a person so licensed to warehouse such products on which duty has not been paid". Rule 27 (1) provides for the deposit of unmanufactured products in a private bonded store-room in the premises of the curer; but that is allowed only on a licence obtained from the Collector of Central Excise, who may take a bond also from the curer. The other sub-rules in this rule may be omitted. Then we come to the important rule as far as this case is concerned, viz., rule 29. The rule reads ''Continuance of curer's liability for payment of duty. When the curer sells unmanufactured products, without payment of duty as provided in rule 24, both the purchasers of the products and the person into whose possession the products pass after purchase shall become liable for the payment of the duty due thereon, but the curer shall not be absolved from the liability laid upon him by rule 19 until the transfer of ownership has been reported to, and acknowledged by, the proper officer." Rule 31 deals with the transport of unmanufactured products under certificate of curer or purchaser. And the coffee seeds in this case will come within the expression 'unmanufactured products' as defined in rule 2. The details of this rule are unnecessary. Rule 33, one of the rules under which action was taken by the Department, may now be noted. Sub-rule (1) of this rule states that no unmanufactured products of any description shall be removed from the place of curing except to the premises of a person licensed to carry on business in such products or to warehouse such products on which duty has not been paid and no such products shall be so 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 curer, a licensed broker or commission agent or the wholesale dealer to whose premises they are to be carried or transported. And sub-rule (2) provides that, if any such person removes such products otherwise than as provided in sub-rule (1), or carries or transports such products without a valid permit or certificate, or, while carrying or transporting such products, does not, on request by an officer, forthwith produce a valid permit or certificate as the case may be, or enters any particulars in the certificate in respect of any such products, which are, or which he has reason to believe to be, false, he shall be liable to a penalty not exceeding Rs. 1,000 and the products in respect of which the offence is committed shall be liable to confiscation Now, the Central Government Pleader has argued that under rule 29 both the purchasers of the products and the persons into whose possession the products pass after purchase are liable for the payment of the duty due thereon. The argument, in other words, is that, in this case, both Ibrayi, who purchased the coffee seeds from the curer, and the respondent, into whose possession the coffee seeds passed after the purchase, are liable to pay the duty. The counsel of the respondent has argued that no provision is made in rule 24 for payment of duty: what is provided in rule 24 is only the disposal (sale) of unmanufactured products: the sale contemplated by rule 24 is a sale to a person duly licensed under the Rules to carry on business in such products or to a person so licensed to warehouse such products on which duty has not been paid. In other words, the argument is that rule 29 must be read: "When the curer sells unmanufactured products without payment of duty as provided in rule 24, both the purchasers * * * * (Note the punctuation no coma after 'products'.) The argument has proceeded that, in this case, there is no evidence that Ibrayi was a person duly licensed under the Rules to carry on business in coffee or a person so licensed to warehouse coffee; and therefore, the respondent, to whose possession the coffee seeds passed from Ibrayi, is not liable to pay the duty. 3. There is some force in this contention of the counsel of the respondent. 3. There is some force in this contention of the counsel of the respondent. Under rule 24 (2), sale to "a person duly licensed under these Rules to carry on business in such products or to a person so licensed to warehouse such products on which duty has not been paid" is allowed: of course, no other sale is allowed. At the same time, no payment of duty, as such, is provided in rule 24: rule 24 (1) provides that unmanufactured products shall be cleared on payment of duty: the payment of duty mentioned therein is not any payment provided by this rule: such provision for payment of duty must be found in some other rule. A reference to rule 19 will also throw some light on this aspect: rule 19 closes with the expression 'transferred as provided in rule 29 to another person duly licensed to carry on business in such products". This means that the transfer as provided in rule 29 is to a person duly licensed to carry on business in such products. In the light of the language of these three rules, viz., rules 29, 24 and 19, we are inclined to think that the contention of the counsel of the respondent is entitled to more weight than the contention of the Central Government Pleader. The result is that, since there is no evidence that Ibrayi was a person duly licensed to carry on business in coffee seeds or is a person licensed to warehouse the seeds, the respondent, into whose possession the coffee seeds passed from Ibrayi, will not come within rule 29. And it must follow that the respondent is not liable to pay the duty on the coffee seeds: the purchaser, Ibrayi, may be liable for the duty. 4. The counsel of the respondent has pointed out that the Department has not chosen to take any action under rule 29, their action being under rule 9 (2) and rule 33 (2), He has contended that the Department should not, therefore, be allowed to rest their case on rule 29 at the appellate stage. This contention we are not inclined to accept, because the position under the Rules appears to be that the Department can claim this under that rule: whether the case comes under that rule or not is another question. 5. This contention we are not inclined to accept, because the position under the Rules appears to be that the Department can claim this under that rule: whether the case comes under that rule or not is another question. 5. The next question relates to the power of the Department to confiscate the offending goods the excisable goods. The Central Government has declared by the Notification No. 68/63, dated 4th May 1963 as amended by a later Notification (No. 9/65-C, dated 6th February 1965) that the provisions of sub-section (1) of section 105, section 110, section 115 [excluding clauses (a) and (c) of subsection (1)], clause (a) of section 118, sections 119, 120, 121, 124 and clause (b) of sub-section (1) of section 142 of the Customs Act, relating to matters specified therein, be applicable in regard to like matters in respect of the duties imposed by section 3 of the Central Excises and Salt Act. Of course, certain modifications and alterations, as mentioned in the Notifications themselves, are incorporated in the relevant sections so adapted. 6. The Central Government Pleader has argued that the right to confiscate the excisable goods (the offending goods) is contained in section 120 (1) of the Customs Act, one of the sections adapted. The argument, on the other hand, by the counsel of the respondent is that the power to confiscate under the Customs Act, is contained in section 111, which is not one of the sections adapted, with the result that the power to confiscate the offending goods is not available so far as the Excises and Salt Act is concerned. Now, section 120 (1) of the Customs Act deals with smuggled goods; and it reads: "Smuggled goods may be confiscated notwithstanding any change in their form. " The G.Os. adapting this section state, inter alia, that reference to " Smuggled goods" shall be deemed to be reference to " excisable goods which have been removed in contravention of any of the provisions of the Central Excise Rules, 1944". The result is that the adapted section 120 (1) will read: "Excisable goods which have been removed in contravention of any of the provisions of the Central Excise Rules, 1944 may be confiscated notwithstanding any change in their form." 7. The result is that the adapted section 120 (1) will read: "Excisable goods which have been removed in contravention of any of the provisions of the Central Excise Rules, 1944 may be confiscated notwithstanding any change in their form." 7. The argument of the Central Government Pleader is that this provision contains a power to confiscate the excisable goods, which have been removed in contravention of any of the provisions of the Central Excise Rules; and that such power of confiscation is available, even if the goods have changed their form. In other words, the argument is that the excisable goods may be confiscated, and that, notwithstanding any change in their form. 8. This argument is being met by the counsel of the respondent by stating that the power of confiscation contained in section 120 (1) is only a power to confiscate smuggled goods which have changed their form. The contention is that this power does not include a, general power to confiscate all smuggled goods: it is only a power to confiscate smuggled goods which have changed their form. We do not think this contention is tenable. In our opinion, the power of confiscation contained in section 120 (1) is a power to confiscate all excisable goods which have been removed in contravention of any of the provisions of the Central Excise Rules; and that such power of confiscation is available even if the goods have changed their form. In the Customs Act, both the sections are necessary, because section 111 does not deal with "smuggled goods" as such. The expression "smuggled goods" is also not defined in the Customs Act: section 2 (39) says that "smuggling", in relation to any goods, means any act or omission which will render such goods liable to confiscation under section 111 or section 113. In the adapted section 120, "smuggled goods" has a definite meaning; and in the light of that meaning, that section will include all smuggled goods including smuggled goods which have changed their form. 9. The result of this discussion is that the coffee seeds recovered from the godown of the respondent are liable to confiscation. (We wish to point out that the adaptation of some of the sections of the Customs Act by the Notifications under section 12 of the Central Excises and Salt Act has not been brought to the notice of the Single Judge.) 10. (We wish to point out that the adaptation of some of the sections of the Customs Act by the Notifications under section 12 of the Central Excises and Salt Act has not been brought to the notice of the Single Judge.) 10. During the discussion at the bar, two decisions of our Court have been brought to our notice, the decision of a Single Judge in A. S. Bava v. Collector of Customs and Central Excise, Cochin 1965 K.L.T 481 and the decision by a Division Bench in Collector of Customs and Central Excise, Cochin v. A. S. Bava 1966 K.L.T 232, in appeal against the first decision. The rule that was considered in that case was mainly rule 32 dealing with tobacco. The Single Judge allowed the writ petition and quashed the action taken by the Department under the said rule. This decision was upheld by the Division Bench in appeal. But, in the judgment of the Division Bench, paragraph 9 reads: "We are clear on a reading of rule 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 rule, 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 con. signee and pass into his ownership, the power of confiscation under rule 32 (2) is unavailable." 11. It is pointed out by the Government Pleader that the observations contained in the last two sentences of the passage quoted above is not warranted by rule 32. The counsel of the respondent also agrees with this. signee and pass into his ownership, the power of confiscation under rule 32 (2) is unavailable." 11. It is pointed out by the Government Pleader that the observations contained in the last two sentences of the passage quoted above is not warranted by rule 32. The counsel of the respondent also agrees with this. We have scrutinised rule 32: and sub-rule (2) states that, if any person carries, transports or receives tobacco without a valid permit, certificate or sale-note, or, while carrying or transporting or receiving such tobacco, does not, on request by an officer, forthwith produce a valid permit, certificate or sale-note, as the case may be, or 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 Rs. 1,000 and the tobacco in respect of which the offence is committed shall be liable to confiscation. The Division Bench appears to have thought that, once transport had ceased and the goods had come to rest in the premises of the consignee and passed into his ownership, the power of confiscation was unavailable under rule 32 (2). The provisions of rule 32 (2) indicated above do not warrant this construction. For instance, if a person carries, transports or receives tobacco without a valid permit, certificate or sale-note, he is liable to penalty and the tobacco, in respect of which the offence is committed, is liable to confiscation too: there is nothing in the rule to indicate that once the carrying, the transporting or the receiving has ceased, the tobacco is not liable to confiscation: on the other hand, the tobacco, "in respect of which the offence is committed", is liable to confiscation. We, therefore, express considerable doubt regarding the correctness of this observation. At any rate, since that rule does not directly apply to the case before us, we are not expressing any final opinion on the correctness of that observation, nor can we do so, since that observation is also by a Division Bench. 12. The appeal is allowed in part; and the confiscation order passed by the Department is upheld. At any rate, since that rule does not directly apply to the case before us, we are not expressing any final opinion on the correctness of that observation, nor can we do so, since that observation is also by a Division Bench. 12. The appeal is allowed in part; and the confiscation order passed by the Department is upheld. Regarding the order appropriating the excise duty payable by the respondent, we agree with the view expressed by the Single Judge and hold that the Department has no right to collect the excise duty from the respondent. To that extent the appeal is dismissed. And we pass no order regarding costs.