Genuine return of goods defeats unaccounted stock allegations where challan, quantity match, and departmental acceptance support the transaction.

Goods returned by the buyer were treated as genuine, where the challan recorded the return before inspection, the quantity matched the stock found, and the return had been intimated to and accepted by the department. On those facts, no material showed that the goods were in fact unreturned or unaccounted. The Tribunal's view that the stock was not liable to confiscation, redemption fine or penalty was upheld, and the department's challenge failed.

---

---

Issues: Whether the goods found in the respondent's godown were unaccounted goods liable to duty, confiscation, fine and penalty, or goods validly returned by the buyer.

Analysis: The challan showed that the buyer had returned the goods on the day before inspection, and the quantity mentioned in the challan matched the quantity found during inspection. The return was intimated to the department and was admitted and accepted by it. No material was produced to show that the goods had not in fact been returned. On these facts, the return of goods was held to be a genuine transaction and not an afterthought, and the goods were not treated as unaccounted stock.

Conclusion: The finding of the Tribunal setting aside confiscation, redemption fine and penalty was upheld, and the department's appeal failed.

---