Unaccounted removal of excisable goods justifies confiscation and penalty, while excessive redemption fine may be reduced on facts.

Removal of excisable goods without recording them in the production register and without an actual debit of duty in the PLA constituted a substantive breach of statutory accountal requirements. The debit entry on the invoice could not be treated as proof of duty payment, and Rule 173Q permitted confiscation and penalty even without proof of intention to evade duty. Confiscation of the goods and imposition of penalty were therefore upheld. As the duty involved in the seized goods was comparatively small, the original redemption fine and penalty were found excessive and were reduced.

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Issues: (i) whether goods removed without being accounted for in the production register and without actual debit of duty in the PLA were liable to confiscation and penalty; (ii) whether the redemption fine and penalty required reduction on the facts of the case.

Issue (i): Whether goods removed without being accounted for in the production register and without actual debit of duty in the PLA were liable to confiscation and penalty.

Analysis: The goods were not recorded in the production register, and the debit entry shown on the invoice could not be treated as actual payment of duty. The omission to record production and clearance in the statutory records and the failure to make an actual debit in the PLA constituted a substantive violation. Rule 173Q permitted confiscation of goods removed without accountal and imposition of penalty without proof of intention to evade duty.

Conclusion: The confiscation of the goods and imposition of penalty were justified.

Issue (ii): Whether the redemption fine and penalty required reduction on the facts of the case.

Analysis: Although confiscation and penalty were upheld, the duty involved in the seized goods was comparatively small. In that backdrop, the original redemption fine and penalty were considered excessive.

Conclusion: The redemption fine and penalty were reduced.

Final Conclusion: The revenue's challenge succeeded in part: the findings of confiscation and penalty were sustained, but the monetary impositions were scaled down.

Ratio Decidendi: Removal of excisable goods without proper accountal in statutory records and without actual debit of duty attracts confiscation and penalty under Rule 173Q, irrespective of proof of intention to evade duty.

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