Non-accountal of finished goods in statutory stock records justified confiscation and penalty where altered entries showed concealed production.

Finished PV Shirting was treated as liable to confiscation where the statutory RG-I stock register did not reflect the goods at the time of inspection and the entry was altered immediately after the visit. Rule 53 required proper accountal of manufactured goods, and Rule 173Q(1)(b) attached confiscation and penalty to non-accountal of finished goods. The production slips and the Section 14 statement supported the finding that the original entry had been changed to conceal unaccounted production. Even if some wrapped goods were excluded from finished-goods treatment, substantial unaccounted stock still remained, so the contrary finding of no excess stock and no breach of Rule 53 was unsustainable.

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Issues: Whether the seized PV Shirting was unaccounted finished goods liable to confiscation and whether penalty was justified under the Central Excise Rules, 1944.

Analysis: The dispute turned on whether the stock of finished PV Shirting was correctly reflected in the RG-I Register at the time of the officers' visit. Rule 53 required proper maintenance of the stock account of manufactured goods in the prescribed register, and Rule 173Q(1)(b) visited non-accountal of finished goods with liability to confiscation and penalty. The production slips showed only 4316 sq. mtrs. for 17.08.1998, while the RG-I Register had been altered to show 84316 sq. mtrs. by adding a figure 8 before 4316 immediately after the visit. The statement recorded under Section 14 supported that the original entry had been altered to conceal unaccounted production. Even on acceptance of the finding that a portion of the goods wrapped in polythene was not to be treated as finished goods, there still remained substantial unaccounted production. The finding of the Commissioner (Appeals) that there was no excess stock and no breach of Rule 53 was therefore unsustainable.

Conclusion: The PV Shirting was liable to confiscation and the penalty was rightly restored; the Revenue succeeded.

Ratio Decidendi: Where finished goods are not properly accounted for in the statutory stock register and alteration of entries is established, the goods are liable to confiscation and penalty under the Central Excise Rules, 1944.

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