Non-accountal of excisable goods alone does not justify confiscation where no attempted removal or preparation for removal is proved.

Mere non-accountal of finished excisable goods in statutory records did not justify confiscation or a penalty under the stricter penal provision where there was no evidence of removal, loading, or any preparatory act toward illegal removal. The goods were treated as rejected or spillover quantities, and the record failed to show the intention required for confiscatory action. Applying strict construction of penal provisions, the only contravention established was non-accountal, which attracted only the limited penalty prescribed for that default. Confiscation and redemption fine were therefore unsustainable, and the penalty was confined to the maximum amount permissible for non-accountal, granting partial relief to the assessee.

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Issues: Whether mere non-accountal of finished goods in the statutory records justified confiscation and penalty under Rule 173Q of the Central Excise Rules, or only a limited penalty under Rule 226 of the Central Excise Rules.

Analysis: The goods were found unaccounted for, but there was no evidence that they were being removed from the factory, loaded for transport, or otherwise prepared for illegal removal. On the facts, the goods fell into categories of rejected or spillover quantities, and the record did not establish the intention or preparatory acts necessary to sustain action under the harsher confiscatory provision. Penal provisions are to be construed strictly, and in the absence of proof of attempted removal or preparation for removal, the requirements for confiscation and for penalty under Rule 173Q were not satisfied. The only contravention made out was non-accountal in the statutory records, which attracted Rule 226.

Conclusion: Confiscation and redemption fine under Rule 173Q were not sustainable. The penalty was confined to the maximum permissible amount under Rule 226 and was reduced accordingly, resulting in partial relief to the assessee.

Ratio Decidendi: Mere non-accountal of excisable goods, evidence of illegal removal or preparation for removal, does not warrant confiscation or penalty under the stricter penal provision, and only the limited penalty specifically provided for non-accountal can be imposed.

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