Third-party ownership claim failed where seized excisable goods were found in the assessee's premises without credible proof of separate occupation.

Goods found in an assessee's premises may be treated as unaccounted and liable to confiscation where the assessee cannot produce credible evidence that the premises were separately occupied by other firms or that the goods belonged to third parties. The claimed tenancy was not proved, the supporting letter did not establish separate occupation, and the alleged occupant could not be traced at the stated address. The assessee also failed to explain satisfactorily how the menthol and DMO were stored in its bonded store room. On these facts, the confiscation and penalty were upheld.

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Issues: Whether the confiscation of the seized menthol and DMO and the penalty imposed on the assessee were sustainable when the assessee claimed that the goods belonged to other occupants of the premises.

Analysis: The goods were found in the assessee's premises and the assessee failed to produce reliable material showing that any portion of the premises had in fact been rented out to other firms. The letter relied upon did not establish such tenancy, the alleged occupant could not be traced at the address given, and the explanation that the seized goods belonged to others remained unsubstantiated. The assessee also failed to explain satisfactorily how the goods came to be stored in its bonded store room. On these facts, the departmental finding that the goods were unaccounted and liable to confiscation was upheld.

Conclusion: The confiscation and penalty were sustained and the assessee's challenge failed.

Ratio Decidendi: A claim that seized excisable goods belonged to third parties must be supported by credible evidence of separate occupation and ownership; absent such proof, goods found in the assessee's premises may validly be treated as unaccounted and liable to confiscation under the Central Excise Rules.

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