Unaccounted excisable goods and RG-I non-entry justified confiscation and penalty, with monetary relief reduced after settlement.

Finished goods found unaccounted in the factory and not entered in the RG-I register were treated as contravening Rule 10 of the Central Excise Rules, supporting confiscation and penalty under Rule 25(1)(b). The absence of statutory records at the factory during inspection, coupled with the duty-evasion background and settlement before the Settlement Commission, supported the view that the goods were meant for clandestine removal. Confiscation and liability to penalty were therefore sustained, while the prior settlement of duty liability justified moderation of the monetary consequences. The redemption fine and penalties were reduced accordingly.

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Issues: Whether goods not entered in the RG-I register and found unaccounted in the factory were liable to confiscation and whether penalties on the manufacturer and its directors were justified, with consequential reduction of redemption fine and penalties.

Analysis: The statutory records were not available in the factory at the time of inspection and were later found at the head office. The finished goods found in the factory were not entered in the RG-I register, and in the backdrop of a duty-evasion allegation that had been settled before the Settlement Commission, the unaccounted goods were treated as intended for clandestine removal. Non-accountal of excisable goods in the prescribed RG-I register constituted contravention of Rule 10 of the Central Excise Rules, attracting confiscation and penalty under Rule 25(1)(b) of the Central Excise Rules, 2002. At the same time, the fact that the duty liability had been settled justified moderation of the monetary consequences.

Conclusion: Confiscation of the seized goods and imposition of penalty were upheld, but the redemption fine and penalties were reduced.

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