Stock discrepancy and non-accountal justified duty demand, confiscation, and penalty, but fine and penalty were reduced.

Duty demand based on stock discrepancy was sustained only to the extent supported by verification of records relating to movement of goods to job workers. Confiscation was upheld because the assessee failed to maintain proper RG-1 accounting and did not establish that the excess stock was supported by collateral records. Redemption fine and penalty were also justified on the finding of non-accountal, but their quantum was held excessive and was reduced. The appeal was therefore partly allowed in favour of the assessee.

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Issues: Whether the duty demand, confiscation of goods, redemption fine and penalty were sustainable, and whether the quantum of fine and penalty required reduction.

Analysis: The duty demand was examined on the basis of the stock discrepancy and the records relating to movement of goods to job workers. The confirmed demand was restricted to the extent supported by verification. On confiscation, the absence of proper RG-1 accounting and the failure to establish that the excess stock was duly supported by collateral records justified action under the confiscatory provision. The imposition of redemption fine and penalty was also upheld on the finding of non-accountal, but the amounts were considered excessive in the circumstances.

Conclusion: The confirmation of duty, confiscation and liability to fine and penalty was sustained, but the redemption fine and penalty were reduced. The appeal was only partly allowed in favour of the assessee.

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