Unaccounted excisable goods: confiscation and penalty sustained, but redemption fine and personal penalty were reduced.

Fully finished excisable goods found unaccounted in the factory were liable to confiscation and penalty under Rule 173Q because non-accountal in statutory records was undisputed and the labour-unrest explanation did not excuse the duty to account for manufactured goods, especially where production and clearances continued and the packed goods were found in the bonded store room. The reasoning also rejected reliance on the absence of intent to evade duty as a complete bar in these circumstances. Confiscation and penalty were sustained in principle, but the monetary consequences were moderated by reducing both the redemption fine and the personal penalty.

---

---

Issues: Whether finished excisable goods found unaccounted for in the factory were liable to confiscation and penalty under Rule 173Q of the Central Excise Rules, 1944, and whether the redemption fine and penalty required reduction.

Analysis: The goods were fully finished and excisable, and their non-accountal in the statutory records was not in dispute. The explanation of labour unrest was not accepted as sufficient to displace the obligation to account for manufactured goods, particularly when production and clearances were shown to have continued during the relevant month and the packed goods were found in the bonded store room. On these facts, the case did not fall within the ratio that mere non-accountal without intent to evade duty or absence of mens rea would by itself preclude confiscation or penalty. However, the circumstances justified moderation of the monetary consequences.

Conclusion: The confiscation and penalty were sustained in principle, but the redemption fine was reduced and the personal penalty was also reduced.

Final Conclusion: The appeal succeeded only to the extent of reduction in the redemption fine and penalty, while the challenge to the adjudication order otherwise failed.

---