Non-accounting of finished excisable goods can justify confiscation and penalty, while monetary consequences may be reduced on the facts.

Finished excisable goods found in stock but not reflected in statutory records can attract confiscation and penalty under Rule 209 even without proof of actual removal or intent to evade duty. Physical presence of the goods in the factory does not, by itself, negate non-accounting where the statutory records do not tally, and explanations based on accounting mistakes or computer-report discrepancies may be insufficient. On the facts, the discrepancy was treated as not serious in relation to the business operations, so the confiscation and penalty were sustained in principle but both the fine and penalty were substantially reduced.

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Issues: Whether finished excisable goods found in the bonded store room but not tallying with the statutory records could be confiscated and visited with penalty under Rule 209 of the Central Excise Rules, and whether the quantum of fine and penalty required reduction.

Analysis: Rule 209 covers not only removal of excisable goods in contravention of the Rules or with intent to evade duty, but also non-accounting of excisable goods manufactured and available in stock but omitted from the statutory records. The presence of the goods in the factory did not by itself exclude the operation of the rule, and the explanation of accounting errors and computer-report discrepancies did not displace the finding of non-accounting. At the same time, the circumstances indicated that the discrepancy was not of a serious character in relation to the overall business operations, and the explanation supported reduction of the monetary consequences.

Conclusion: Confiscation and penalty were sustainable under Rule 209, but the fine and penalty were reduced.

Final Conclusion: The adjudication was upheld in principle, but the monetary burden was moderated by substantial reduction of both fine and penalty.

Ratio Decidendi: Finished excisable goods physically available in stock but not accounted for in the statutory records can attract confiscation and penalty under Rule 209 even without proof of removal, though the quantum of fine and penalty may be reduced on the facts.

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