Stock record requirements cannot be applied retrospectively to cigarette packing materials; confiscation and penalty were set aside.

Confiscation of cigarette tissue paper, filter tip paper, filter rods and other packing materials was held unsustainable because, on the date of search, only cut tobacco had been notified as the principal raw material requiring stock records. The later Trade Notice and circulars extending the record-keeping regime to the other materials were issued after the seizure and could not be applied retrospectively. In the absence of any contemporaneous notice or circular in force on the relevant date, the alleged discrepancy in those materials did not justify confiscation under the cited Central Excise Rules, and the penalty was also set aside.

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Issues: Whether the confiscation of cigarette tissue paper, filter tip paper, filter rods and other packing materials, with consequent penalty, was sustainable when on the date of search those items were not yet prescribed as principal raw material requiring maintenance of stock records.

Analysis: The appellant's case succeeded on the footing that, on the date of visit, only cut tobacco had been notified as the principal raw material for cigarette manufacture and a prescribed record was required only for that material. The later Trade Notice and circulars, which brought the other materials within the regime requiring maintenance of accounts, were issued after the date of seizure. In the absence of any contemporaneous Trade Notice or circular applicable on the relevant date, the alleged discrepancy in those materials could not justify confiscation under the cited Central Excise Rules.

Conclusion: The confiscation and penalty were not sustainable and the appeal was allowed.

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