Unaccounted finished goods may be confiscated, but contamination claims need verification before seizure-based forfeiture.

Adjustment of corresponding excess and shortage in packed and loose finished goods was upheld where the stock chart supported the appellate authority's reconciliation. A contemporaneous statement that 4.5 M.T. of goods was contaminated could not be ignored without physical verification or contrary evidence, so confiscation of that quantity was not justified. By contrast, a separate excess of 32.771 M.T. of unaccounted finished goods found in the factory, for which no satisfactory explanation was offered, was liable to confiscation. The redemption fine was moderated in the circumstances and reduced.

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Issues: (i) Whether the adjustment of packed and loose stock of finished goods was justified and whether confiscation of the stated contaminated quantity was warranted; (ii) Whether the remaining excess unaccounted finished goods were liable to confiscation and redemption fine.

Issue (i): Whether the adjustment of packed and loose stock of finished goods was justified and whether confiscation of the stated contaminated quantity was warranted.

Analysis: The stock chart showed corresponding excess and shortage in packed and loose quantities of the same finished goods, and the adjustment made by the first appellate authority was supported by the record. As to the 4.5 M.T. quantity stated to be contaminated, the statement made immediately after stock verification could not be brushed aside without physical verification of the goods or any contrary material. In the absence of such verification, the contaminated quantity could not be treated as finished goods liable to confiscation.

Conclusion: The adjustment of packed and loose stock was upheld, and confiscation of 4.5 M.T. of contaminated goods was not justified.

Issue (ii): Whether the remaining excess unaccounted finished goods were liable to confiscation and redemption fine.

Analysis: A separate excess of 32.771 M.T. of finished goods was found in the factory, and no proper explanation was offered for that excess. The goods were unaccounted and seized from the premises, so the absence of a satisfactory explanation justified confiscation. The redemption fine, however, required moderation in the facts and circumstances.

Conclusion: Confiscation of 32.771 M.T. of Ferro Alloys was upheld and the redemption fine was reduced to Rs. 60,000/-.

Final Conclusion: The appellate order was modified only to the extent that confiscation of the unaccounted excess finished goods was sustained while the monetary penalty in lieu of confiscation was reduced.

Ratio Decidendi: Unaccounted excess finished goods found in the factory, when left without a satisfactory explanation, are liable to confiscation, while a contemporaneous statement about contamination cannot be disregarded in the absence of physical verification or contrary evidence.

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