Penalty for excise record breaches needs factual justification; mere statutory non-accountal does not automatically sustain confiscation or penalty.

Penalty for non-accountal of excisable goods cannot follow automatically from a statutory breach; the authority must first be satisfied on the facts that the case warrants penalty, and mens rea remains ordinarily relevant to that determination. On the facts discussed, the goods were not entered in the statutory records, but the concurrent finding was that the default did not justify confiscation or penalty and that finding was not perverse. The court also treated that concurrent factual conclusion as insufficient to raise a substantial question of law under Section 35G of the Central Excise Act, 1944.

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Issues: Whether confiscation and penalty for non-accountal of excisable goods could be sustained in the absence of proof that a case for penalty was made out, and whether the finding that no penalty was warranted gave rise to any substantial question of law.

Analysis: The appeal under Section 35G of the Central Excise Act, 1944 challenged concurrent findings that the goods were not entered in the statutory records but, on the facts, the default did not justify penalty. The Court held that a violation of a statutory requirement does not by itself automatically attract penalty; the authority must first be satisfied that the facts justify imposition of penalty. Reliance was placed on the principle that mens rea is ordinarily relevant to penalty, and the concurrent factual finding that no case for penalty was made out was not shown to be perverse.

Conclusion: The challenge to the deletion of confiscation and penalty failed, and the appeal was not maintainable on any substantial question of law.

Ratio Decidendi: Penalty cannot be imposed merely because a statutory breach is shown; the authority must first find, on the facts, that the case warrants penalty, and concurrent non-perverse findings on that issue do not raise a substantial question of law.

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