Delayed stock register entry may justify confiscation, but penalty must be proportionate absent clandestine removal allegations.

Delayed entry of finished goods in the statutory stock register, where contemporaneous records and explanation were not contradicted and no clandestine removal was pleaded, may support confiscation but calls for a calibrated penalty rather than the harshest monetary consequences. On these facts, confiscation was sustained, while the redemption fine and company penalty were reduced. The personal penalty on the commercial manager was set aside because no specific violation or adequate basis for individual liability was recorded. The duty demand remained upheld.

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Issues: (i) Whether the unaccounted finished goods found in the factory premises justified confiscation and consequent redemption fine and penalty on the company. (ii) Whether the penalty imposed on the commercial manager was sustainable.

Issue (i): Whether the unaccounted finished goods found in the factory premises justified confiscation and consequent redemption fine and penalty on the company.

Analysis: The stock was not entered in the RG-1 register by the time of the visit, although the authorized signatory explained on the date of inspection that it represented production of the previous shifts and the current day, awaiting entry. The private records were not contradicted. The failure to account was treated as a technical violation in the absence of any allegation of clandestine removal in the show cause notice. The duty demand was also not contested.

Conclusion: Confiscation was sustained, but the redemption fine and the company's penalty were reduced.

Issue (ii): Whether the penalty imposed on the commercial manager was sustainable.

Analysis: No specific violation was established against the commercial manager, and the order did not record a sufficient basis for imposing personal penalty on him.

Conclusion: The penalty on the commercial manager was set aside.

Final Conclusion: The duty demand remained upheld, the confiscation stood, the monetary consequences against the company were substantially reduced, and the personal penalty was annulled.

Ratio Decidendi: A delayed entry in the statutory stock register, without a pleaded case of clandestine removal and in the face of unchallenged contemporaneous explanation, may justify confiscation but warrants a calibrated penalty response rather than the harshest consequences.

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