Unrecorded finished excisable goods attract confiscation without proof of clandestine removal under record-keeping rules.

Fully finished excisable goods not entered in the prescribed records were held liable to confiscation under Rule 173Q, because once goods reach the finished stage they must be properly accounted for; proof of clandestine removal was not required. As confiscation was sustained, redemption fine in lieu of confiscation was upheld, and the penalty was left undisturbed since no separate appeal had been filed against that part of the order. The principle stated is that failure to record finished goods itself attracts confiscation where statutory records are mandatory.

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Issues: (i) Whether fully finished goods found in excess and not entered in the prescribed records were liable to confiscation without proof of clandestine removal; (ii) whether the redemption fine and penalty were sustainable.

Issue (i): Whether fully finished goods found in excess and not entered in the prescribed records were liable to confiscation without proof of clandestine removal.

Analysis: The goods were admittedly not accounted for in the prescribed records. Once goods had reached the stage of fully finished goods, they were required to be recorded in the statutory records. The failure to account for such goods constituted a breach attracting confiscation under Rule 173Q. In that situation, proof of an attempt at clandestine removal was not necessary.

Conclusion: The issue is decided against the assessee and in favour of the Revenue. The goods were liable to confiscation.

Issue (ii): Whether the redemption fine and penalty were sustainable.

Analysis: Since the confiscation was upheld, the goods were ordered to be confiscated with a redemption fine in lieu of confiscation. The request for reduction of penalty was not entertained because no appeal had been filed by the assessee against that part of the order, and the penalty portion was not interfered with.

Conclusion: The issue is decided against the assessee and in favour of the Revenue. The redemption fine was imposed and the penalty was upheld.

Final Conclusion: The order was modified only to the extent that the non-confiscation finding was set aside and the goods were confiscated with redemption fine, while the penalty remained undisturbed.

Ratio Decidendi: Where fully finished excisable goods are not accounted for in the prescribed records, confiscation under Rule 173Q is attracted and proof of clandestine removal is not required.

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