Unexplained excess stock in excise records can justify confiscation, with intent to evade duty inferred from surrounding facts.

Unexplained excess excisable goods found in the factory and not entered in statutory records may be confiscated under Rule 173Q of the Central Excise Rules, 1944. The text explains that physical verification showed excess zinc ingots, while the record and production details did not support a plea of clerical omission or goods being under testing. It further states that intent to evade duty can be inferred from the surrounding circumstances, even without a separate allegation of clandestine removal. On those facts, confiscation was sustained and the reduced penalty upheld.

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Issues: Whether excess finished goods found in the factory and not entered in the RG-1 register were liable to confiscation and penalty under Rule 173Q of the Central Excise Rules, 1944, and whether absence of proved mens rea or an allegation of clandestine removal barred such action.

Analysis: The excess zinc ingots were found on physical verification and remained unexplained. The statutory records and the production details did not support the plea that the goods were omitted from RG-1 merely because they were under testing or on account of a clerical mistake. The scheme of Rule 173Q was applied on the footing that clause (b) covers non-accountal of excisable goods and clause (d) applies where contravention is with intent to evade duty. On the facts, the unexplained excess stock, read with the surrounding record, justified an inference of intention to evade payment of duty. The absence of a separate allegation of actual removal did not negate confiscability where the goods were not accounted for and the explanation offered was rejected.

Conclusion: The confiscation and reduced penalty were upheld. The contention that mens rea was essential to defeat confiscation failed, and the appellant was not entitled to relief.

Ratio Decidendi: Unexplained excess excisable goods found in stock and not entered in statutory records can be confiscated under Rule 173Q, and intent to evade duty may be inferred from the surrounding circumstances where the manufacturer fails to account for the goods.

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