Unaccounted excise stock and fabricated production records cannot defeat confiscation where the seized quantity remains partly unexplained.

Unaccounted excess stock of toilet soap found in the factory remained liable to confiscation where the respondent's explanation did not account for the entire seized quantity. Even accepting the claimed production report for 16-11-1994, it explained only 1476 boxes out of 5418 seized boxes, leaving a substantial unexplained balance. The document relied on before the appellate authority was treated as fabricated and inconsistent with the respondent's own admission of actual production, so the order-in-appeal rested on incorrect facts and an unverified record. The confiscation and consequential adjudication action were therefore upheld, and the respondent's challenge failed.

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Issues: Whether the excess toilet soap found in the factory was unaccounted stock liable to confiscation under Rule 173Q(1) of the Central Excise Rules, 1944, and whether the Commissioner (Appeals) erred in accepting the respondent's explanation based on the alleged production report of 16-11-1994.

Analysis: The Tribunal found that the respondent's explanation did not cover the entire seized quantity. Even on acceptance of the claimed production for 16-11-1994, the production report accounted only for 1476 boxes out of the 5418 seized boxes, leaving a substantial balance unexplained. The document relied upon before the appellate authority was treated as fabricated and inconsistent with the respondent's own admission regarding the actual production. Since the order-in-appeal rested on incorrect facts and an unverified document, the appellate authority's conclusion could not stand.

Conclusion: The confiscation and consequential action taken in the adjudication proceedings were upheld, and the respondent's challenge to them failed.

Final Conclusion: The Revenue succeeded, and the order-in-appeal was set aside.

Ratio Decidendi: A finding based on an unaccounted balance of seized goods cannot be displaced by a document that does not explain the entire quantity and is found to be unreliable or fabricated.

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