Confiscation and penalty for unrecorded excisable goods disputed over whether non-entry alone proves non-accountal or evasion.

Non-entry of excess raw material and finished excisable goods in statutory records was viewed by one member as insufficient by itself to prove non-accountal or clandestine removal, so confiscation and penalty were not warranted absent evidence of mala fide intent to evade duty. The other member held that goods not regularly entered in the daily stock account were not satisfactorily accounted for and fell within Rule 25, making confiscation and penalty permissible, though the redemption fine and penalty were excessive. The text records a divergence of opinion on liability to confiscation and penalty, with no final majority conclusion stated.

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Issues: Whether excess raw material and finished excisable goods found in the factory premises, but not properly recorded in the statutory records, were liable to confiscation and whether penalties could be imposed under Rule 25 of the Central Excise Rules, 2002.

Analysis: One member held that non-entry in the RG-1 register by itself did not establish non-accountal or clandestine removal, and that raw material found in excess was not liable to confiscation merely on the basis of delayed or incomplete entries. The same view was taken for finished goods on the reasoning that mere non-recording, without evidence of mala fide intention to evade duty, was insufficient to attract confiscation or penalty. The other member held that the daily stock account had to be maintained on a regular basis, that goods not entered in the records were not satisfactorily accounted for, and that the statutory scheme under Rule 25 permitted confiscation and penalty on such facts; however, the quantum of redemption fine and penalty was considered excessive.

Outcome: The members differed on whether the seized goods were liable to confiscation and whether penalties were imposable, and no final majority decision emerges from the text.

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