Non-accountal of excisable goods alone did not justify confiscation; limited penalty for contravention was still sustainable.

Mere non-accountal of excisable goods in an approved godown, without proof that invoices were issued without delivery of goods, did not justify confiscation or redemption fine under the erstwhile Central Excise Rules, 1944. Rule 52A was treated as inapplicable on the facts, and the alleged irregularity was attributed to storage constraints rather than the specific misuse alleged in the notice. A contravention of the rules was still found, so a limited penalty was warranted against the registered dealer, but the dealer's penalty was reduced and the penalty on the authorised signatory was set aside.

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Issues: (i) Whether non-accountal of excisable goods by a registered dealer in the approved godown justified confiscation and imposition of redemption fine under the erstwhile Central Excise Rules, 1944. (ii) Whether penalty was sustainable on the registered dealer and the authorized signatory.

Issue (i): Whether non-accountal of excisable goods by a registered dealer in the approved godown justified confiscation and imposition of redemption fine under the erstwhile Central Excise Rules, 1944.

Analysis: The show cause notice alleged non-accountal of goods found in the godown and referred to Rule 52AA(3), which required maintenance of the RG 23D register by a registered dealer. The record did not establish the allegation that invoices were issued without delivery of goods. Rule 52A was held inapplicable on the facts, and the material only showed non-accountal caused by storage constraints. In the circumstances, the alleged irregularity did not warrant confiscation of the goods.

Conclusion: Confiscation and redemption fine were set aside.

Issue (ii): Whether penalty was sustainable on the registered dealer and the authorized signatory.

Analysis: The proceedings disclosed a contravention of the rules, but not such a case as to justify confiscation. For the dealer, some penalty remained warranted for the irregularity. For the authorized signatory, the record did not justify sustaining the penalty imposed.

Conclusion: Penalty on the registered dealer was reduced, and penalty on the authorized signatory was set aside.

Final Conclusion: The appeal succeeded in part by removing confiscation and fine, reducing the dealer's penalty, and deleting the penalty on the authorized signatory.

Ratio Decidendi: Mere non-accountal of goods in the circumstances of the case, without proof of the specific alleged misuse of invoices, did not justify confiscation under the cited rules, though a limited penalty could still be imposed for contravention.

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