RG-1 non-entry does not justify confiscation where goods were unfinished, under physical control, and no clandestine removal was shown.

Goods found in the packing room of a 100% EOU under physical control were not liable to confiscation merely because they were not entered in the RG-1 register. The goods were still in incomplete condition, meant to be packed before RG-1 accounting, and there was no material showing an attempt to clear them clandestinely into the domestic area. On those facts, the alleged procedural lapse did not establish confiscability under the Central Excise Rules, and the Revenue's challenge failed.

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Issues: Whether the goods found in the packing room were liable to confiscation for not being entered in the RG-1 register and for alleged contravention of the Central Excise Rules.

Analysis: The goods were found in small lots in the packing room of a 100% EOU under physical control, with an Inspector posted at the unit. They were not yet in fully finished condition and were meant to be packed before entry in the RG-1 register. There was also no material to show any attempt to clear the goods without payment of duty into the domestic area. On these facts, the absence of entry in the RG-1 register did not justify confiscation.

Conclusion: The goods were not liable for confiscation, and the Revenue's challenge failed.

Final Conclusion: The appeal was rejected because the alleged procedural lapse did not establish confiscability of the goods on the facts found.

Ratio Decidendi: Goods found in the course of packing and not yet fully finished for RG-1 accounting, especially under physical control and without any attempt at clandestine removal, are not liable to confiscation merely because they were not entered in the RG-1 register.

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