RG 23D non-entry alone does not justify confiscation or penalty absent evidence of misuse or revenue prejudice.

Mere non-entry of received goods in the RG 23D register under the excise rules, by itself, does not justify confiscation or penalty on a registered dealer. The omission may prevent issuance of modvatable invoices and the passing of Modvat credit for those goods, but it does not prejudice Revenue or constitute an offence absent further incriminating material. Confiscation and penalty were therefore not warranted and were set aside in favour of the assessee.

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Issues: Whether non-entry of received goods in the RG 23D register under Rule 57GG(3) justified confiscation of the goods and imposition of penalty on the registered dealer.

Analysis: The goods received by a registered dealer are entered in RG 23D so that modvatable invoices can be issued and the buyer can avail Modvat credit. Non-entry of such goods does not, by itself, prejudice Revenue, because the consequence is only that no Modvat credit can be passed on in respect of those goods. The omission may prevent the dealer from issuing modvatable invoices for the unentered goods, but it does not constitute an offence warranting confiscation or penalty in the absence of further incriminating material.

Conclusion: The confiscation and penalty were not justified and were set aside in favour of the assessee.

Ratio Decidendi: Mere failure to make an entry in RG 23D under the applicable excise rules, without evidence of misuse or revenue prejudice, does not by itself justify confiscation of goods or imposition of penalty on a registered dealer.

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