Unaccounted excisable goods may be confiscated for record lapses, but penalties for clandestine removal need evidence, not presumption.

Unaccounted excisable goods were treated as liable to confiscation where production and clearance records were not maintained up to date and clearances were made without proper entries. That statutory record lapse justified confiscation and redemption fine. However, the finding of clandestine removal was unsupported by evidence and could not rest on presumption alone. Penalties based on clandestine removal were therefore unsustainable: the firm's penalty under Section 11AC was reduced to a nominal amount for the record-keeping breach, and the partner's penalty under Rule 26 was set aside.

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Issues: Whether unaccounted excisable goods were liable to confiscation and whether penalties imposed on the firm and its partner were sustainable where the production and clearance records were not maintained up to date and there was no evidence of clandestine removal.

Analysis: The production-clearance records were not maintained for about twenty days and clearances had been effected without proper entries. Such non-maintenance of statutory records is a serious lapse and the goods not accounted for were liable to confiscation. At the same time, the finding of intention to clandestinely remove the goods was not supported by evidence and rested only on presumption. In the absence of proof of clandestine removal, penalty equal to the estimated duty under Section 11AC and penalty on the partner under Rule 26 were not justified, though some penalty for the record lapse was warranted.

Conclusion: The confiscation and redemption fine were upheld. The firm's penalty was reduced to a nominal amount for non-maintenance of records, and the partner's penalty was set aside.

Final Conclusion: The order was modified by sustaining confiscation of the goods, reducing the firm's penalty, and deleting the partner's penalty.

Ratio Decidendi: Unaccounted excisable goods may be confiscated for failure to maintain statutory records, but penalties based on clandestine removal require supporting evidence and cannot rest on mere presumption.

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