RG-I entry dispute did not justify confiscation and penalty where no clandestine removal was shown.

Goods were not shown to be fully manufactured on the factual record and expert opinion, and there was no evidence of clandestine production or attempted removal without payment of duty. The dispute was limited to the stage at which entry in RG-I was required, and that accounting issue alone did not justify confiscation. Confiscation and penalty were therefore held unsustainable, and the Revenue's challenge failed.

---

---

Issues: Whether the goods were liable to confiscation and penalty for non-entry in RG-I on the ground that they were fully manufactured goods.

Analysis: The respondent's case that the goods were not fully manufactured was supported by the factual record and expert opinion. There was no evidence of clandestine production or any attempt to remove the goods without payment of duty. The dispute was only about the stage at which the goods ought to have been entered in RG-I, and such an accounting controversy by itself did not justify confiscation.

Conclusion: The confiscation and penalty were not sustainable, and the Revenue's challenge failed.

---