Unaccounted excisable goods may attract confiscation and penalty without separate proof of mens rea where the record is duly prepared.

Excisable goods found unaccounted in a properly recorded panchnama were treated as liable to confiscation under Rule 25(1)(b), read with Section 11AC, and penalty followed the statutory scheme without independent proof of mens rea on the facts noted. The Court also found no procedural infirmity from the absence of separate weighment or counting sheets, because the authorised signatory was present, accepted the proceedings without protest, and admitted the recorded position. The challenge was treated as factual rather than raising any substantial question of law, so the confiscation and penalty were upheld.

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Issues: (i) Whether confiscation and penalty could be sustained for non-accountal of excisable goods under Rule 25(1)(b) of the Central Excise Rules, 2002 without proof of mens rea. (ii) Whether the absence of separate weighment or counting sheets and the challenge based on supply of documents or natural justice vitiated the confiscation and penalty.

Issue (i): Whether confiscation and penalty could be sustained for non-accountal of excisable goods under Rule 25(1)(b) of the Central Excise Rules, 2002 without proof of mens rea.

Analysis: The record showed that excess finished goods were found on physical verification in the presence of the authorised signatory and panch witnesses, and the goods were not entered in the daily stock account. The Court read Rule 25 with Section 11AC of the Central Excise Act, 1944 and held that unaccounted goods are liable to confiscation and that penalty follows the statutory scheme. Mens rea was not treated as a condition for attracting clause (b) in the facts of the case.

Conclusion: The issue was answered against the appellant and in favour of the Revenue.

Issue (ii): Whether the absence of separate weighment or counting sheets and the challenge based on supply of documents or natural justice vitiated the confiscation and penalty.

Analysis: The panchnama was prepared at the spot in the presence of the authorised signatory, who accepted the proceedings without protest and admitted the position recorded therein. On that basis, the Court found no procedural infirmity in the departmental action and treated the challenge as raising factual disputes rather than any substantial question of law.

Conclusion: The issue was answered against the appellant and in favour of the Revenue.

Final Conclusion: The confiscation and penalty were upheld, and the appeal failed on the ground that no substantial question of law arose from the facts found.

Ratio Decidendi: Where excisable goods are found unaccounted in a properly recorded panchnama and the statutory scheme makes such goods liable to confiscation, penalty may follow without independent proof of mens rea, and factual findings of this nature ordinarily do not give rise to a substantial question of law.

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