Strict stock-accounting obligations under excise law justified confiscation, while redemption fine and penalty were reduced.

Non-accountal of finished goods and raw materials was treated as a serious breach of the obligation to maintain proper stock records, and Rule 10A of the Central Excise Rules, 2002 was held attracted on the basis of substantial unrecorded quantities found during inspection. The explanation for the excess stock was found unconvincing, so confiscation was warranted and upheld. Mitigating circumstances were nevertheless noted, leading to reduction of the redemption fine and penalty.

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Issues: Whether non-accountal of finished goods and raw materials justified confiscation and penalty, and whether the amounts of redemption fine and penalty required reduction.

Analysis: The quantity of goods not accounted for at the time of visit was substantial. The obligation to properly account for raw materials and manufactured goods was treated as a strict one and a preventive measure. The explanation for the excess stock was found not convincing, though mitigating circumstances were noted. On these facts, Rule 10A of the Central Excise Rules, 2002 was held attracted and confiscation was warranted.

Conclusion: Confiscation was upheld. The redemption fine and penalty were reduced.

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