Unaccounted excisable goods in factory premises are liable to confiscation and penalty when statutory records do not support ownership or procurement.

Excisable goods found in a manufacturer's premises must be accounted for in statutory records; where excess goods are found and no document shows lawful procurement or proper accounting, confiscation and penalty under Rule 173Q are attracted. A bare plea that the goods belonged to another unit does not displace the duty to maintain and substantiate records for goods manufactured or stored in the premises. On the facts, the unaccounted excess goods were rightly confiscated, and the redemption fine and penalty were sustained; reliance on Rule 209A was rejected.

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Issues: Whether excess excisable goods found in the factory premises, which were not accounted for in the statutory records, were liable to confiscation and to penalty under Rule 173Q.

Analysis: The goods found in excess were excisable goods in the manufacturer's premises, and no document was produced to show lawful procurement or accounting of those goods. A manufacturer is obliged to maintain proper records of goods manufactured or stored in the premises and must account for such goods even if they are claimed to be inputs or received from another concern. In the absence of corroboration or record support, the plea that the goods belonged to another unit could not displace the obligation to account for them. The consequence under Rule 173Q was therefore attracted, and the appellate authority's reliance on Rule 209A was not accepted.

Conclusion: The goods were rightly confiscated and the redemption fine and penalty were correctly imposed under Rule 173Q; the assessee's challenge failed.

Ratio Decidendi: Excisable goods found in a manufacturer's premises must be accounted for in statutory records, and unaccounted excess goods are liable to confiscation and penalty under Rule 173Q.

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