Statutory record entry and director penalty fail for defective non-marketable goods absent proof of duty evasion involvement.

Defective, non-marketable confiscated goods were not required to be entered in statutory records as finished goods intended for clearance and sale, because their character and intended destruction under excise law took them outside that treatment. Penalty could also not be imposed on the Director under Rule 209A where there was no substantial evidence of his involvement in the company's alleged duty evasion. The Tribunal's findings on both points were sustained, and the Revenue's challenge failed on that aspect.

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Issues: Whether defective, non-marketable confiscated goods were required to be entered in statutory records and whether penalty could be imposed on the Director in the absence of evidence of involvement in evasion of duty.

Analysis: The Tribunal had found that the confiscated goods were defective and not marketable, and that destruction of such goods had been sought under the excise law. It had also found no substantial evidence showing that the Director was involved in evasion of duty by the company. In those circumstances, goods of that kind, not being finished goods meant for imminent clearance and sale, did not call for entry in the statutory records. Further, Rule 209A could not sustain a penalty on the Director when his involvement in the alleged evasion was not proved.

Conclusion: The Tribunal's view on this issue was upheld, and the challenge by the Revenue failed on this aspect.

Final Conclusion: The appeal was disposed of against the Revenue, with the Tribunal's findings sustained on the disputed issue.

Ratio Decidendi: Defective and non-marketable goods need not be entered as finished goods in statutory records, and penalty on a director cannot be imposed in the absence of evidence showing involvement in duty evasion.

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