Excess stock alone does not justify excise confiscation or penalty without evidence of clandestine removal or intent to evade duty.

Excess stock found during stock verification does not by itself justify confiscation or penalty under Rule 173Q of the Central Excise Rules, 1944. The note applies the principle that penal provisions must be strictly construed and that some material showing clandestine removal, attempted evasion, or relevant intent is required. Where the stock difference was only estimated, had accumulated over time, the factory had remained closed for years, and there was no evidence of intended illegal removal, the discrepancy was treated as non-maintenance of accounts rather than a penal breach. Confiscation and penalty were therefore considered unwarranted on those facts.

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Issues: Whether excess stock found during stock verification, without evidence of intended clandestine removal or proper weighment, justified confiscation and penalty under Rule 173Q of the Central Excise Rules, 1944.

Analysis: Confiscation and penalty under the penal rule require more than a mere accounting discrepancy. The decision applied the principle that penal provisions must be strictly construed and that mens rea or some material indicating attempted illegal removal is relevant. On the facts, the stock difference was found to have accumulated over a period, the factory had remained closed for years, the verification was based on estimates rather than actual weighment, and there was no evidence of intent to evade duty or remove goods clandestinely. In these circumstances, the discrepancy was treated as a case of non-maintenance of accounts rather than a basis for confiscation.

Conclusion: Confiscation and penalty were not justified, and the Revenue's appeal failed.

Ratio Decidendi: Mere excess stock or non-accountal, without evidence of clandestine removal or intent to evade duty, does not by itself warrant confiscation or penalty under a penal excise provision that must be strictly construed.

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