Packed unaccounted excisable goods and unsupported repair claims justify confiscation, duty demand, and only limited relief.

Fully packed clocks and watch movements kept outside statutory records were held liable to confiscation because the assessee gave no credible explanation that testing required post-packing and produced no evidence of that practice. The 77 clocks allegedly produced on the date of visit were given partial relief, as their confiscation was set aside on the view that they may have been produced that day. The 1104 clocks found at the project office attracted duty because the claim that they had earlier been cleared on duty and later returned for repairs was unsupported by documentary evidence, buyer correspondence, or clearance records. The redemption fine and penalty were reduced accordingly.

---

---

Issues: (i) Whether the packed and unaccounted clocks and watch movements were liable to confiscation and penalty, and whether the 77 clocks claimed to have been produced on the date of visit were exempt from confiscation; (ii) Whether the 1104 clocks found at the project office, claimed to have been returned after sale for repairs, were liable to duty demand.

Issue (i): Whether the packed and unaccounted clocks and watch movements were liable to confiscation and penalty, and whether the 77 clocks claimed to have been produced on the date of visit were exempt from confiscation.

Analysis: The clocks and watch movements were found fully packed, accompanied by warranty cards, and kept outside the statutory records without any convincing explanation that testing necessarily had to be done only after packing. No evidence showed that such a practice was followed earlier. The Tribunal therefore accepted the finding that the goods were kept in violation of the Central Excise law and were liable to confiscation under the Central Excise Rules. As regards the 77 clocks, the Tribunal accepted that they could possibly have been produced on the same day, and that confiscation in respect of that quantity should not stand.

Conclusion: Confiscation and penalty were upheld for the main quantity of clocks and watch movements, but confiscation of the 77 clocks was set aside and the redemption fine was reduced.

Issue (ii): Whether the 1104 clocks found at the project office, claimed to have been returned after sale for repairs, were liable to duty demand.

Analysis: The claim that the clocks had earlier been cleared on payment of duty and later received back for repairs was unsupported by documentary evidence, buyer correspondence, or traceable clearance records. In the absence of proof, the Tribunal accepted the lower authority's finding that the explanation was unsubstantiated and that duty was payable on the quantity in question.

Conclusion: The duty demand on the 1104 clocks was sustained.

Final Conclusion: The appeal succeeded only to a limited extent, with partial relief confined to the 77 clocks and reduction of the redemption fine and penalty, while the remaining confiscation and duty demand were maintained.

Ratio Decidendi: Goods found fully packed and unaccounted in statutory records are liable to confiscation when the assessee fails to establish a credible and consistent explanation supported by records, and a claim of prior clearance or return for repairs must be proved by documentary evidence.

---