RG-1 non-entry without clandestine intent cannot justify confiscation of goods under central excise law.

Confiscation of excess goods not entered in the RG-1 register was held unsustainable because the record did not show clandestine removal or any intention to evade duty. The Tribunal noted that the non-entry in statutory records had already attracted the maximum penalty under Rule 226 of the erstwhile Central Excise Rules, and there was no material to prove that the goods were kept outside the register for illicit clearance. In the absence of evidence of clandestine intent, the order setting aside confiscation was found free from infirmity, and the Revenue's challenge failed.

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Issues: Whether confiscation of excess found goods not entered in the RG-1 register was sustainable in the absence of evidence of clandestine removal or intention to evade duty.

Analysis: The Tribunal found no material on record to show that the goods were kept out of the RG-1 register with a view to clandestine removal. It noted that for the non-entry in the statutory records, the Commissioner (Appeals) had already imposed the maximum penalty under Rule 226 of the erstwhile Central Excise Rules. In the absence of evidence establishing clandestine intent, the order setting aside confiscation did not suffer from infirmity.

Conclusion: Confiscation was not sustainable and the Revenue's appeal failed.

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