Confiscation and penalty for non-accountal goods may stand without duty evasion, but factual leniency can still be sustained.

Confiscation and penalty for excess stock and non-accountal of goods in an SSI unit can be sustained even without a duty demand where the relevant rules are invoked, but earlier lenient treatment in favour of SSI units may still be maintained on the facts. The Tribunal noted the Larger Bench view that intention to evade duty is not an essential ingredient for confiscation and penalty under Rule 173Q(1)(a), (b) and (c) of the Central Excise Rules, 1944. However, it found no reason to interfere with the lower appellate authority's discretionary relief, which had set aside confiscation and reduced the penalty to a token amount. The departmental challenge therefore failed and the relief was sustained.

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Issues: Whether confiscation and penalty were justified for excess stock and non-accountal of goods found in an SSI unit even though no duty demand had been raised.

Analysis: The Tribunal noted that earlier decisions had taken a lenient view in favour of SSI units where no duty evasion was involved, but it also considered the Larger Bench ruling that intention to evade duty is not an essential ingredient for confiscation and penalty under Rule 173Q(1)(a), (b) and (c) of the Central Excise Rules, 1944. On the facts, the lower appellate authority had already taken a lenient view by setting aside confiscation and reducing the penalty to a token amount. The Tribunal found no reason to interfere with that discretionary and fact-based approach.

Conclusion: The departmental challenge to the relief granted by the lower appellate authority failed, and the order was sustained.

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