Excess stock and central excise penalty: no section 11AC penalty where the case was not one of short levy.

Excess finished goods and raw material found during inspection indicated excess stock rather than short levy or non-levy, so the matter was treated as one involving confiscation on payment of fine and duty according to the factual position. The recorded statement under section 14 was considered insufficient, by itself, to sustain penalty under section 11AC. On that reasoning, penalty under section 11AC of the Central Excise Act, 1944 was held not imposable where the case did not involve short levy or non-levy.

---

---

Issues: Whether non-accountal of finished goods and raw material in statutory registers warranted confiscation and penalty; whether the statement recorded under section 14 of the Central Excise Act, 1944 was sufficient to sustain penalty under section 11AC.

Analysis: Excess finished goods and excess raw material were found during the visit of Central Excise officers, showing a case of excess stock rather than short levy or non-levy. On those facts, the matter was treated as one involving confiscation of the goods on payment of fine and duty, while the applicability of penalty under section 11AC had to be examined separately. In the light of the Supreme Court decisions referred to by the High Court, the case was found not to attract penalty under section 11AC.

Conclusion: Penalty under section 11AC of the Central Excise Act, 1944 was not imposable on the appellants.

Final Conclusion: The decision rejected imposition of penalty under section 11AC, while leaving the confiscation aspect to follow the factual position of excess stock and raw material.

Ratio Decidendi: Where excess goods are detected and the case does not involve short levy or non-levy, penalty under section 11AC cannot be imposed merely on that basis.

---