Unexplained excess excisable stock can attract confiscation and penalty under Rule 173Q without proof of actual removal.

Excisable goods found in excess in the factory and not satisfactorily accounted for may be confiscated under Rule 173Q, even without proof of actual removal from the premises. The governing principle is that unexplained stock variation in the finished goods area can justify an inference of intended removal and duty evasion, so prior evidence of clandestine clearance or separate proof of mens rea is not required for confiscation on these facts. The confiscation of the excess goods and the penalty under Rule 173Q were upheld.

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Issues: Whether excess finished stock found in the factory premises, which was not properly accounted for, was liable to confiscation and penalty under Rule 173Q of the Central Excise Rules even without proof of actual removal from the premises.

Analysis: The excess wool tops were admittedly found in the finished goods room and were not satisfactorily explained. Rule 173Q permits confiscation where a manufacturer fails to account for excisable goods manufactured, produced or stored by him, and the rule does not require prior proof of clandestine removal or independent mens rea for confiscation in such a case. The unexplained accumulation of excess stock in the finishing room supported an inference that the goods were intended for removal and duty evasion. The authorities below were therefore justified in applying the rule and in relying on decisions holding that excess stock not accounted for in the statutory records is liable to confiscation.

Conclusion: The confiscation of the excess goods and the penalty imposed under Rule 173Q were upheld; the challenge failed.

Ratio Decidendi: Where excisable goods are found in excess in the factory premises and the manufacturer fails to account for them satisfactorily, confiscation and penalty may be imposed under Rule 173Q without proof of actual removal from the premises.

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