Non-accountal in RG-1 sustained confiscation and penalty, but redemption fine was reduced as beyond statutory scope.

Unrebutted non-accountal of M.S. ingots in RG-1 justified confiscation and penalty because the excess stock found on inspection matched the recorded shortfall and the explanation of miscalculation was not proved. The redemption fine, however, had been imposed as a charge "towards other charges" rather than in lieu of confiscation, which was outside the scope of the governing provision and was also excessive on the facts. Confiscation and penalty were therefore sustained in principle, but the redemption fine was interfered with and reduced to Rs. 10,000, granting partial relief to the assessee.

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Issues: (i) whether the confiscation and penalty were sustainable on account of the unrebutted non-accountal of M.S. ingots in RG-1; (ii) whether the redemption fine imposed towards other charges, and the quantum of fine, were legally sustainable.

Issue (i): whether the confiscation and penalty were sustainable on account of the unrebutted non-accountal of M.S. ingots in RG-1

Analysis: The stock found by the officers on inspection was not disputed, nor was the excess over the recorded RG-1 balance. The explanation that the difference might have been due to miscalculation was not established. On these facts, the charge of non-accountal remained unrebutted and the proceedings under the confiscation and penalty provisions were justified.

Conclusion: The confiscation and the imposition of penalty were upheld in principle.

Issue (ii): whether the redemption fine imposed towards other charges, and the quantum of fine, were legally sustainable

Analysis: A fine imposed for a purpose other than in lieu of confiscation is beyond the scope of the statutory provision governing redemption fine. The adjudicating authority had expressly described the amount as towards other charges, and the amount was also considered excessive in the facts of the case. The fine was therefore liable to be interfered with and reduced.

Conclusion: The redemption fine was held unsustainable as originally imposed and was reduced to Rs. 10,000.

Final Conclusion: The order was sustained as regards confiscation and penalty, but the redemption fine was interfered with and reduced, resulting in partial relief to the assessee.

Ratio Decidendi: A redemption fine must be imposed in lieu of confiscation under the governing statutory provision, and where the liability for non-accountal is otherwise established, confiscation and penalty may be sustained even if the redemption fine requires reduction.

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