Non-accountal of factory goods can support confiscation and penalty under Rule 173Q, requiring fresh appellate consideration.

Non-accountal of goods found in a factory may attract confiscation and penalty under Rule 173Q of the Central Excise Rules. The appellate authority had reduced the penalty and set aside confiscation by relying on one line of authority, but had not considered contrary High Court decisions recognising that Rule 173Q can be invoked in such cases. Because that contrary authority was not addressed, the matter required fresh examination by the Commissioner (Appeals), and the earlier appellate order was set aside with remand for reconsideration.

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Issues: Whether non-accountal of goods found in the factory could attract confiscation and penalty under Rule 173Q of the Central Excise Rules, and whether the order reducing the penalty required reconsideration.

Analysis: The order records that the Commissioner (Appeals) had set aside confiscation and altered the penalty by following one line of authority, but had not considered contrary High Court decisions holding that even where goods are not accounted for by the assessee, Rule 173Q can be invoked for confiscation and imposition of penalty. In view of those authorities, the matter was held to require fresh examination by the appellate authority.

Conclusion: The matter was remitted to the Commissioner (Appeals) for fresh decision and the earlier appellate order was set aside.

Final Conclusion: The appeal succeeded to the extent of securing remand for reconsideration on the confiscation and penalty issue.

Ratio Decidendi: Non-accountal of goods can justify invocation of Rule 173Q for confiscation and penalty, and an appellate order ignoring binding contrary authority warrants remand for fresh consideration.

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