Confiscation of unaccounted finished goods: reduction of redemption fine and penalty upheld as a valid discretionary exercise.

Unaccounted finished goods found outside statutory records were liable to confiscation under Rule 25 of the Central Excise Rules, 2002, but the provision did not prescribe any minimum redemption fine for such confiscation. For personal penalty, the rule provided for Rs. 10,000 or the duty amount, whichever was greater; on the stated facts, the duty element did not exceed Rs. 10,000. The appellate authority's reduction of both redemption fine and penalty was treated as a discretionary decision based on the facts and circumstances, and it was not shown to be arbitrary or illegal, so the Revenue's challenge failed.

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Issues: Whether the Commissioner (Appeals) was justified in reducing the redemption fine and personal penalty imposed for confiscation of unaccounted finished goods under Rule 25 of the Central Excise Rules, 2002.

Analysis: The goods were found unaccounted in the statutory records and were ordered to be confiscated. The provision invoked did not prescribe any minimum redemption fine for such confiscation. As regards personal penalty, the rule contemplated penalty of Rs. 10,000/- or duty amount, whichever was greater, and on the facts the duty element did not exceed Rs. 10,000/-. The reduction made by the appellate authority was therefore a discretionary exercise based on the facts and circumstances of the case and was not shown to be arbitrary or illegal.

Conclusion: The reduction of redemption fine and penalty was held to be valid, and the Revenue's challenge failed.

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