Excise control over goods in factory premises can support clandestine removal findings where records and gate passes are inconsistent.

Excise control extends to a cycle stand area shown within the approved factory plan, so excisable goods stored there remain subject to accounting and explanation by the assessee. The note also indicates that inconsistent documents, missing procedural endorsements, discrepancies in removal and despatch records, and mismatched values can support an inference of clandestine removal through invalid gate passes. On that basis, confiscation, redemption fine, and penalty may be sustained where the documentary trail and surrounding circumstances do not support the claimed temporary re-storage or lawful movement of goods.

---

---

Issues: (i) Whether the cycle stand area formed part of the factory under the Central Excise law and storage of excisable goods there required accounting and explanation. (ii) Whether the seized motor vehicle parts were clandestinely removed under invalid gate passes and whether confiscation and penalty were justified.

Issue (i): Whether the cycle stand area formed part of the factory under the Central Excise law and storage of excisable goods there required accounting and explanation.

Analysis: The approved ground plan showed that the cycle stand lay within the factory and, therefore, fell within the inclusive definition of factory for excise purposes. Goods kept there were not outside the factory regime merely because the area was used as a cycle stand under an independent contractor. Any storage or removal of excisable goods from that area had to be duly accounted for by the assessee.

Conclusion: The cycle stand area was part of the factory for excise purposes, and the assessee was bound to account for the goods found there.

Issue (ii): Whether the seized motor vehicle parts were clandestinely removed under invalid gate passes and whether confiscation and penalty were justified.

Analysis: The surrounding circumstances, including the date mismatch on the documents, absence of endorsement showing vehicle breakdown, failure to follow the procedure for return of goods, discrepancies in the removal register, manipulation in the GR and despatch records, inconsistencies in the challans, and mismatch in values, supported the finding of illicit removal without payment of duty. The explanation that the goods were re-stored temporarily because of a defective tempo was not accepted. The record also supported the conclusion that the transporter participated in the irregularity, reinforcing the assessee's liability for contravention.

Conclusion: The goods were rightly treated as clandestinely removed, and confiscation together with penalty was justified.

Final Conclusion: The appeal failed in its entirety, and the adjudication imposing confiscation, redemption fine, and penalty was sustained.

Ratio Decidendi: When excisable goods are found within an area forming part of the factory and the documentary trail is inconsistent, manipulated, or unsupported by the prescribed excise procedure, the authorities may infer clandestine removal and uphold confiscation and penalty.

---