Confiscation of factory-stock excisable goods cannot rest on accounting irregularity alone; related fine and penalty must be reconsidered.

Confiscation of excisable goods found lying in the factory was held unsustainable where there was no showing that they had been cleared without duty, and mere accounting irregularity was insufficient to justify confiscation. The confiscation of 450 boxes was set aside. Because the confiscation order failed, the redemption fine and penalty based on it could not stand in their existing form and had to be redetermined by the adjudicating authority after giving the party an opportunity. The appeal was partly allowed.

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Issues: Whether confiscation of 450 boxes of excisable goods was justified and, consequentially, whether redemption fine and penalty required redetermination.

Analysis: The goods in dispute were found to be lying in the factory and the challenge was directed mainly against the confiscation of that portion of the stock. On the facts, confiscation of the 450 boxes was not sustainable. Since the confiscation order was interfered with, the consequential redemption fine and penalty could not be sustained in their existing form and had to be reconsidered by the adjudicating authority in accordance with law after giving an opportunity to the party.

Conclusion: Confiscation of 450 boxes was set aside, and the matter of redemption fine and penalty was remitted for fresh determination. The appeal was partly allowed in favour of the assessee.

Ratio Decidendi: Excisable goods lying in the factory and not shown to have been cleared without duty cannot be ordered to be confiscated merely on an accounting irregularity, and any consequential fine or penalty must be redetermined if confiscation is set aside.

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