RG-1 non-entry alone cannot prove clandestine removal; confiscation and higher penalties fail without evidence of intent to evade duty.

Mere non-entry of finished excisable goods in the RG-1 register, without independent evidence of clandestine removal or intent to evade duty, was treated as insufficient to justify confiscation and substantial penal consequences. The absence of material showing mens rea or an attempt to clear goods without duty payment led to the confiscation and redemption fine being set aside, while the further penalty was found unwarranted. A nominal penalty alone was considered appropriate where the record did not support a finding of deliberate evasion.

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Issues: Whether confiscation, redemption fine, and penalty were justified where finished excisable goods were not entered in the RG-1 register, but there was no independent evidence of intention to remove the goods clandestinely.

Analysis: The absence of an RG-1 entry by itself was held insufficient to establish clandestine removal or intent to evade duty. The finding turned on the lack of independent evidence showing mens rea or an attempt to clear the goods without duty payment. On that footing, confiscation and redemption fine were set aside, and the penalty was reduced to a nominal amount under the relevant penalty provision. The further penalty imposed was also held unwarranted for want of evidence of intent to evade.

Conclusion: The issue was decided in favour of the assessee; mere non-entry in RG-1, without proof of clandestine intent, did not justify the higher penalties or confiscation.

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