Non-accounted excisable goods are liable to confiscation under Rule 25(1)(b) without proof of mens rea.

Excisable goods found in excess within the factory and not entered in the prescribed RG-I records were treated as liable to confiscation under Rule 25(1)(b) of the Central Excise Rules, 2002. The explanation that stock was maintained only on a theoretical basis and weighed at clearance was rejected because it undermined statutory record-keeping and could facilitate clandestine removals. Confiscation under the rule was held not to require proof of mens rea. The redemption fine was sustained, though reduced, and the reduced penalty was upheld.

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Issues: Whether excisable goods found in excess and not entered in the prescribed stock records were liable to confiscation under Rule 25(1)(b) of the Central Excise Rules, 2002, and whether redemption fine could be sustained without proof of mens rea.

Analysis: The goods were found inside the factory and were admittedly not accounted for in the RG-I register. The explanation that stock was maintained on a theoretical basis and actual weighment was done only at clearance was not accepted, since such a practice would impair proper maintenance of statutory records and leave scope for clandestine removals. The Court held that repeated non-accountal of substantial quantities could not be treated lightly. It further held that, under Rule 25(1)(b), confiscation of non-accounted excisable goods does not depend upon mens rea.

Conclusion: The confiscation of the goods was restored and the redemption fine was sustained, though reduced; the penalty as reduced by the appellate authority was upheld. The result was therefore partly in favour of Revenue.

Ratio Decidendi: Under Rule 25(1)(b) of the Central Excise Rules, 2002, excisable goods not accounted for in the prescribed records are liable to confiscation without proof of mens rea.

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