Strict stock-record compliance for manufactured goods sustained confiscation and penalty, while monetary sanctions were reduced.

Failure to record a substantial quantity of manufactured goods in the RG-1 register was treated as a strict contravention of statutory stock-record obligations, because the duty extends to manufactured goods even in loose condition and not merely goods ready for dispatch. An explanation based on holidays and delay in packing and weighment did not excuse prolonged non-accountal over about 10 to 12 days, and penal consequences could follow without proof of mens rea. Confiscation and penalty were sustained, but the facts justified reduction of the redemption fine and penalty.

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Issues: Whether failure to enter a large quantity of manufactured goods in the RG-1 register justified confiscation and penalty under the Central Excise Rules, and whether the quantum of redemption fine and penalty required reduction.

Analysis: The goods found in the factory represented a substantial quantity of production over about 10 to 12 days and were not accounted for in the RG-1 register. The obligation to account for manufactured goods covers not only finished goods ready for dispatch but also goods in loose condition. The explanation based on holidays and delay in packing and weighment did not justify such prolonged non-accountal. The failure attracted penal consequences even in the absence of mens rea. At the same time, the facts warranted some leniency in the quantum of punishment.

Conclusion: Confiscation and penalty were upheld, but the redemption fine and penalty were reduced.

Final Conclusion: The assessee succeeded only to the extent of obtaining reduction in the monetary penalties, while the finding of contravention and the resultant confiscation were sustained.

Ratio Decidendi: The obligation to account for manufactured goods in statutory stock records is strict, and substantial non-accountal can attract confiscation and penalty even without proof of mens rea.

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