Non-accountal of excisable goods can justify confiscation and penalty, but redemption fine must remain proportionate.

Non-accountal of goods ready for removal in statutory excise records can justify confiscation and penalty under Rule 173Q(1) where the conduct indicates intent to evade duty; the explanation of clerical mistake was rejected, so confiscation and penalty were sustained. Redemption fine, however, must be proportionate to the value of the goods liable to confiscation; because the fine imposed was excessive relative to that value, it was reduced. The result was limited relief only on the quantum of redemption fine, with the confiscation liability and penalty remaining intact.

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Issues: (i) whether goods found loaded on the truck and not entered in the statutory records were liable to confiscation and attracted penalty under Rule 173Q(1) of the Central Excise Rules, 1944; (ii) whether the redemption fine imposed on confiscation required reduction.

Issue (i): whether goods found loaded on the truck and not entered in the statutory records were liable to confiscation and attracted penalty under Rule 173Q(1) of the Central Excise Rules, 1944

Analysis: The goods found on the truck were ready for removal, supported only by earlier SDM cards, but were not entered in RG1 until the visit and interception. The explanation of clerical mistake was not accepted. In the self-removal regime, proper maintenance of statutory records is essential, and the conduct was held to show intent to evade duty. The finding of non-accountal therefore justified confiscation and sustained liability under Rule 173Q(1).

Conclusion: The confiscation and penalty under Rule 173Q(1) were upheld against the assessee.

Issue (ii): whether the redemption fine imposed on confiscation required reduction

Analysis: The fine originally imposed was considered excessive in relation to the value of the goods actually found liable to confiscation, which was much lower than the amount of fine imposed. On that basis, the quantum of fine was scaled down.

Conclusion: The redemption fine was reduced in favour of the assessee.

Final Conclusion: The appeal succeeded only to the limited extent of reduction in redemption fine, while the confiscation liability and penalty were sustained.

Ratio Decidendi: In the self-removal system, deliberate non-accountal of goods ready for removal can establish intent to evade duty and justify confiscation and penalty under Rule 173Q(1), but redemption fine must remain proportionate to the value of the goods liable to confiscation.

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