Non-accountal of finished goods supports confiscation, and a notice remains valid despite omission of the exact sub-clause.

Goods found unaccounted in statutory stock records were treated as finished goods on the evidence in the seizure panchnama, and confiscation for non-accountal was upheld under the Central Excise rules. The plea that the goods were unfinished or intended for export was rejected because it was unsupported and not raised earlier. Omission to mention the exact sub-clause of Rule 173Q in the show cause notice did not vitiate the penalty where the factual basis of the charge was clear and no prejudice was shown. The penalty was sustained, though reduced in quantum.

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Issues: (i) whether the goods seized were finished goods liable to confiscation for non-accountal in the stock register; (ii) whether absence of mention of the exact sub-clause of Rule 173Q in the show cause notice vitiated the penalty.

Issue (i): whether the goods seized were finished goods liable to confiscation for non-accountal in the stock register.

Analysis: The seizure panchnama, signed by the official concerned with receipt of raw materials and despatch of finished goods, was relied upon as evidence that the goods were finished goods. The plea that they were unfinished or meant for export was not accepted, the latter also having not been raised before the lower authorities. The Tribunal further relied on the view that goods not entered in statutory records are liable to confiscation and penalty under the applicable Central Excise rules, and that such liability is attracted by non-accountal itself.

Conclusion: The goods were held to be finished goods, and confiscation for non-accountal was upheld.

Issue (ii): whether absence of mention of the exact sub-clause of Rule 173Q in the show cause notice vitiated the penalty.

Analysis: The show cause notice was found to contain the full factual basis for the proposed action, and the Tribunal held that omission to specify the exact sub-clause caused no prejudice. The reliance placed on the decision in Amrit Foods was rejected on the facts, and the penalty was sustained though reduced in quantum.

Conclusion: The objection to the penalty on the ground of non-mention of the precise sub-clause was rejected.

Final Conclusion: The appeal failed on merits, the confiscation was affirmed, and the penalty was reduced to a lesser amount in the interests of justice.

Ratio Decidendi: Goods not accounted for in the statutory stock records are liable to confiscation and penalty under the Central Excise rules, and a show cause notice is not invalid merely because it omits the exact sub-clause when the factual basis of the charge is otherwise clear.

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