SSI exemption threshold and unaccounted stock led to confiscation for clandestine removal, but fine and penalty were reduced.

Unaccounted physical stock, when read with clearance figures, showed that the SSI exemption threshold under Notification No. 8/03-CE was crossed and registration was required. In the absence of registration, the stock was treated as liable to confiscation as goods meant for clandestine removal, and that confiscation was sustained. However, the redemption fine and penalty were found excessive on the facts and were reduced.

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Issues: Whether the physical stock found in excess or shortage against the book balance was liable to confiscation as goods meant for clandestine removal, and whether the redemption fine and penalty required reduction.

Analysis: The stock difference was treated as relevant for computing the appellant's clearances up to the date of visit. On that basis, the clearances crossed the SSI exemption threshold under Notification No. 8/03-CE dated 01.03.2003, and the appellant was required to obtain registration. In the absence of registration, the physical stock was held to be liable to confiscation as meant for clandestine removal. At the same time, the monetary sanctions imposed were found to be excessive in the facts and circumstances.

Conclusion: The confiscation was sustained, but the redemption fine and penalty were reduced.

Final Conclusion: The appellant obtained only partial relief, with the confiscation upheld and the fiscal penalties substantially scaled down.

Ratio Decidendi: Where unaccounted stock and clearance figures show that the SSI exemption threshold was crossed and registration was required, the goods may be treated as liable to confiscation for clandestine removal, while redemption fine and penalty can be moderated if found excessive.

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