Estimated stock verification cannot support confiscation or penalty when excess goods are not established by actual weighment.

Confiscation of stock and penalty under Rule 25 could not be sustained where the alleged excess stock was determined only by eye estimation during stock verification and not by actual weighment. Because the goods were not weighed and the exact quantity of raw material and finished goods was not reliably established, the foundation for treating the stock as excess failed in law. The impugned order was therefore set aside and relief granted against confiscation and penalty.

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Issues: Whether confiscation of stock and penalty under Rule 25 could be sustained when the alleged excess stock was determined only by eye estimation and not by actual weighment.

Analysis: The stock verification was conducted for about ten hours and the record showed that the quantity of raw material and finished goods had been assessed on estimation basis. Since the goods were not actually weighed, the exact quantity could not be ascertained with certainty. In such circumstances, the foundation for treating the stock as excess and for ordering confiscation and penalty was legally unsustainable.

Conclusion: The confiscation and penalty could not be sustained and the appeal was allowed.

Final Conclusion: The impugned order was set aside because the alleged excess stock was not established by actual weighment and the assessee obtained relief from confiscation and penalty.

Ratio Decidendi: A confiscation based on estimated stock verification, without actual weighment or reliable determination of exact shortage or excess, is not sustainable in law.

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