Unaccounted factory stock liable to confiscation; unsupported inspection explanation failed, while redemption fine was reduced.

Goods found fully packed in the factory but not entered in RG-1 records are liable to confiscation under the Central Excise confiscation provisions. The explanation that they were awaiting inspection was rejected because it was unsupported by evidence, and Rule 25 was treated as parallel to Rule 173Q for unaccounted stock found in the premises. The setting aside of confiscation was therefore unsustainable, so confiscation was upheld. On the facts, the redemption fine was reduced, and the penalty as reduced in the impugned order was not enhanced.

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Issues: Whether goods found in the factory and not entered in RG-1 records were liable to confiscation under Rule 25 of the Central Excise Rules.

Analysis: The goods were admittedly found in the factory in fully packed condition and were not entered in RG-1. The explanation that they were awaiting inspection was not supported by evidence. Rule 25 of the Central Excise Rules was treated as parallel to Rule 173Q of the Central Excise Rules, under which unaccounted goods found in the factory are liable to confiscation. The order setting aside confiscation was therefore unsustainable. Considering the facts, the redemption fine was reduced, and the penalty as reduced in the impugned order was not enhanced.

Conclusion: Confiscation of the unaccounted goods was upheld and the assessee's challenge failed on this issue.

Ratio Decidendi: Goods found in the factory but not accounted for in statutory stock records are liable to confiscation under the central excise confiscation provisions.

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