Confiscation and penalty for export-bound goods set aside where a 100% EOU had no RG-I requirement and no duty evasion was shown.

A 100% Export Oriented Unit not required to maintain an RG-I register could not be treated as having evaded duty merely because goods remained in the factory for export. Relying on Board Circular No. 212/46/96-C.X. dated 20-5-1996, the material on record did not support confiscation, redemption fine, or penalty where the goods were intended for export and no duty evasion was inferred. The separate shortage in the intermediate product was addressed by payment of the admitted duty liability, which did not justify further punitive action.

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Issues: Whether confiscation of goods, redemption fine and penalty were justified when the respondent was a 100% Export Oriented Unit not required to maintain RG-I register and the goods remained in the factory for export.

Analysis: The respondent was a 100% EOU and, in view of Board Circular No. 212/46/96-C.X., dated 20-5-1996, was not required to maintain RG-I register. The goods were still lying in the factory and were intended for export, so there was no basis to infer evasion of duty. The shortage of the intermediate product was separately met by the respondent through payment of the admitted duty liability.

Conclusion: The confiscation of goods, redemption fine and penalty were rightly set aside, and the Revenue's challenge failed.

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