MOTIBHAI FULABHAI PATEL & CO. vs M/S. R. PRASAD AND ORS.

The Supreme Court held that under Rule 40 of the Central Excise Rules, 1944, the Collector could only confiscate goods on which duty had not been paid, and not the entire mixture of duty-paid and non-duty paid tobacco. The Court clarified that while the appellants were guilty of mixing duty-paid tobacco with non-duty paid tobacco, the confiscation should only reflect the value of the non-duty paid portion. The appeal was allowed in part, limiting the confiscation to the value of the non-duty paid tobacco only.