Confiscation of unaccounted stock upheld, but natural justice required a fresh hearing for the second appellant on ownership.

Goods found unaccounted during stock verification in a self-removal regime were treated as liable to confiscation because the manufacturer had to account for fully manufactured stock in statutory records, and the explanation of an absent records clerk did not rebut the inference of liability; the confiscation and penalty against the first appellant were upheld. The second appellant, however, had not been given a fair opportunity to contest the finding that the seized goods were not its property or that it was not an aggrieved party, so the dismissal of its appeal as infructuous was set aside and the matter remanded for de novo consideration after hearing it.

---

---

Issues: (i) Whether confiscation of unaccounted goods and penalty imposed on the first appellant for non-accountal of stock were sustainable; (ii) whether the second appellant's appeal could be dismissed as infructuous or required fresh consideration on merits.

Issue (i): Whether confiscation of unaccounted goods and penalty imposed on the first appellant for non-accountal of stock were sustainable.

Analysis: The goods were found unaccounted at the first appellant's premises during stock verification, and the explanation that the concerned records clerk was absent was found insufficient. In a self-removal regime, the manufacturer is obliged to account for fully manufactured goods in the statutory records. The absence of immediate loading arrangements did not negate the possibility of later removal, and the circumstances supported the view that the goods were liable to confiscation and that penalty was justified.

Conclusion: The confiscation and penalty against the first appellant were upheld and the challenge failed.

Issue (ii): Whether the second appellant's appeal could be dismissed as infructuous or required fresh consideration on merits.

Analysis: The second appellant was not given an effective opportunity to contest the finding that the seized goods were not its property and that it was not an aggrieved party. The show cause notice and adjudicatory approach did not afford the second appellant a proper opportunity to meet the case against confiscation of goods found in its . The second appellant was therefore entitled to be heard and to produce evidence on ownership and the nature of the goods, and the matter required reconsideration in accordance with natural justice.

Conclusion: The dismissal of the second appellant's appeal as infructuous was set aside and the matter was remanded for de novo consideration after hearing the second appellant.

Final Conclusion: The first appellant's liability was sustained, while the second appellant obtained a fresh hearing on remand, resulting in partial relief overall.

Ratio Decidendi: In confiscation proceedings, goods found unaccounted in the course of self-removal can be treated as liable to confiscation on the surrounding circumstances, but any person from whose premises the goods are seized must be afforded a fair opportunity to contest the confiscation and establish its case before adverse findings are recorded.

---