Excise register non-entry and storage breach justified confiscation, but fine and penalty were reduced on surrounding facts.

Goods were liable to confiscation where, after quality control clearance, they were not entered immediately in the prescribed R.G. 1 register and remained in the manufacturing section instead of the bonded room, amounting to non-compliance with the Central Excise accounting and removal procedure. The procedural breach sustained the finding of contravention and confiscation. However, the fine and penalty were reduced because the surrounding facts did not fully establish an intention to evade duty and the monetary consequences were considered excessive on the material before the Tribunal.

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Issues: (i) Whether the goods were liable to confiscation and penalty for non-entry in the R.G. 1 register after completion of quality control tests and for keeping the goods in the manufacturing section instead of the bonded room; (ii) whether the fine and penalty deserved reduction on the facts found.

Issue (i): Whether the goods were liable to confiscation and penalty for non-entry in the R.G. 1 register after completion of quality control tests and for keeping the goods in the manufacturing section instead of the bonded room.

Analysis: The admissions of the factory manager showed that the production had reached the stage of R.G. 1 entry after quality control clearance, but the entries were made only at the time of removal. The goods had remained in the manufacturing section and were not shifted to the bonded room. The Tribunal treated this as a clear violation of the accounting and removal procedure under the Central Excise Rules and held that the absence of immediate entry in the statutory register supported confiscation under the rule governing unaccounted goods.

Conclusion: The confiscation was upheld and the contravention under the relevant excise rules was sustained.

Issue (ii): Whether the fine and penalty deserved reduction on the facts found.

Analysis: Although the procedural violation was established, the Tribunal accepted that the department had not fully dealt with the plea that there was no intention to evade duty and that the circumstances did not show complete preparations for removal. On that limited aspect, the Tribunal found that the monetary consequences were excessive and required moderation while maintaining the finding of contravention.

Conclusion: The fine and penalty were reduced.

Final Conclusion: The order of confiscation was sustained, but the monetary relief granted by the Tribunal substantially reduced the adverse fiscal consequences.

Ratio Decidendi: Goods that are not entered in the prescribed excise register after completion of production and are not moved in accordance with the statutory procedure are liable to confiscation, but the quantum of fine and penalty must reflect the surrounding circumstances and the absence of proved intent to evade duty.

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