RG-1 non-entry of soda ash sweepings cannot sustain confiscation or penalty without proof of clandestine removal.

Soda ash sweepings or spillages not entered in RG-1 did not, by itself, justify confiscation or penalty where no clandestine removal was established. The material was treated as sweepings or spillages rather than fresh manufactured stock, and testing was necessary to determine whether it was sweepings or B-grade material. Because such material could also represent goods already removed on payment of duty, the omission to record it in RG-1 could not sustain an adverse presumption. Confiscation and penalty were therefore not sustainable.

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Issues: Whether confiscation and penalty could be sustained merely because soda ash sweepings or spillages were not entered in RG-1, in the absence of any finding of clandestine removal.

Analysis: The goods were found to be sweepings or spillages and not fresh manufactured stock. No clandestine removal was established, and on that basis no duty demand was made. The non-entry in RG-1, by itself, did not justify an adverse presumption where the goods required testing to determine whether they were sweepings or B-grade material. Since such material could also form part of goods already removed on payment of duty, the omission to enter it in RG-1 did not warrant confiscation or penalty.

Conclusion: Confiscation and penalty were not sustainable; the appeal succeeded in favour of the assessee.

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