Stock discrepancy and unaccounted excisable goods justified duty demand, confiscation and penalties under strict central excise compliance rules.

Physical verification showing shortage and excess of excisable goods, coupled with signed stock records and no contemporaneous protest, supported an inference of unaccounted removal and improper accounting under the Central Excise Rules, 1944. The manufacturer's explanation of heavy stock, market recession and human error was not substantiated by evidence sufficient to displace the verified discrepancies. Strict compliance with statutory entry and storage requirements was required, and the breach was treated as more than a technical lapse. Duty demand, confiscation-related consequences and penalties were upheld.

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Issues: Whether the shortage and excess of excisable goods found on physical verification justified a finding of clandestine removal and consequent duty demand, confiscation and penalty under the Central Excise Rules, 1944.

Analysis: The stock verification was conducted in the presence of the manufacturer's representatives and the recorded variations were signed without contemporaneous protest. The explanation of heavy stock, recession in the market and human error was not supported by evidence sufficient to displace the verified shortage and excess reflected in the statutory records. The rules governing removal and storage of excisable goods require strict compliance with the prescribed entries and procedure, and their breach attracts statutory consequences. The case was not treated as a mere technical or venial lapse; the absence of proper accounting and the verified shortage supported the inference of removal without payment of duty, while the excess stock remained unaccounted for in the prescribed records.

Conclusion: The demand of duty, confiscation-related consequence and penalties were upheld, and the challenge to the order failed.

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