Non-accountal in RG-I alone does not justify confiscation where clandestine removal is not established.

Finished goods found in excess and not entered in the RG-I register were examined for confiscation and personal penalties. The appellants stated that the goods were under testing for galvanising defects and were entered in RG-I only after testing and customer inspection. As no clandestine removal or duty evasion was shown, mere non-accountal was treated as a procedural lapse rather than a substantive contravention. The cited precedent was applied to hold that confiscation cannot rest solely on non-entry in records when marketability and intent to remove clandestinely are not established. Confiscation and personal penalties were therefore held unsustainable.

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Issues: Whether finished goods found in excess and not entered in the RG-I register were liable to confiscation and whether personal penalties on the appellants were sustainable in the absence of evidence of clandestine removal.

Analysis: The appellants consistently explained that the goods were under testing for galvanising defects and were entered in the RG-I register only after such testing and customer inspection. The record did not show any attempt to remove the goods clandestinely or to evade duty. The reasoning in the cited precedent was applied to hold that mere non-accountal, by itself, does not justify confiscation when clandestine removal is not established. On the facts, the goods were not shown to have reached a fully marketable stage before testing, and the omission was treated as a procedural lapse rather than a substantive contravention.

Conclusion: Confiscation of the seized goods and the personal penalties were not justified; the impugned order was set aside and relief was granted to the appellants.

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