Confiscation for unaccounted excisable goods upheld; absence of mens rea did not bar penalty, though fine was reduced.

Unaccounted excisable goods found during inspection were liable to confiscation under Rule 173Q(1) of the Central Excise Rules, 1944 because the panchnama showed non-maintenance of records and no reliable material rebutted those findings. Absence of mens rea did not defeat confiscation or penalty on these facts, as liability attached to the failure to account for goods produced or stored by the manufacturer. The challenge to liability therefore failed on merits, but the redemption fine and penalty were moderated in view of the circumstances and the duty involved.

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Issues: Whether unaccounted excisable goods were liable to confiscation and whether redemption fine and penalty were sustainable, including whether absence of mens rea affected liability under Rule 173Q(1) of the Central Excise Rules, 1944.

Analysis: The goods were found unaccounted during inspection, the panchnama recorded non-maintenance of the relevant records, and no reliable material was produced to dislodge those findings or to show that the partner's statement had been retracted. Rule 173Q(1) of the Central Excise Rules, 1944 authorises confiscation and penalty where excisable goods produced or stored by a manufacturer are not accounted for. The absence of mens rea does not prevent confiscation or penalty in such a case. At the same time, the quantum of redemption fine and penalty must be moderated in light of the facts and the duty involved.

Conclusion: Confiscation of the goods was upheld, the challenge to liability failed on merits, and the redemption fine and penalty were reduced to a lower amount.

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