Confiscation for unrecorded excisable goods fails where the notice invokes the wrong rule and omits the specific provision

Goods physically found in a factory but not entered in the RG 1 register were held not to fall within Rule 173Q(b), because "does not account for" was construed as more than a mere non-entry in the prescribed records. The text notes that Rule 226 specifically covered goods not entered in the manufacturer's account, and confiscation could have been sustained under that provision if it had been invoked. As the show cause notice did not cite Rule 226 or propose confiscation under it, confiscation under Rule 173Q was unsustainable and the Department's challenge failed.

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Issues: Whether goods physically found in the factory but not entered in the RG 1 register could be confiscated under Rule 173Q of the Central Excise Rules, and whether the absence of a citation to Rule 226 in the show cause notice affected the legality of confiscation.

Analysis: Rule 173Q(b) was construed as dealing with a manufacturer who does not account for excisable goods manufactured, produced or stored by him. The expression "does not account for" was held not to be the same as mere non-entry in the prescribed register. On that reading, the rule was not the appropriate provision for goods physically present but not entered in the records. The reasoning also noted that Rule 226 specifically dealt with goods not entered in the account to be maintained by a manufacturer, and that, had the notice invoked that rule, confiscation could have been sustained. As the show cause notice neither proposed confiscation under Rule 226 nor cited it, interference with the appellate order was not justified.

Conclusion: Confiscation under Rule 173Q was not sustainable on the facts, and the absence of Rule 226 in the notice was fatal to the Department's case.

Ratio Decidendi: A confiscation provision must be applied according to its true statutory scope, and where a specific contravention is covered by another provision not invoked in the notice, confiscation cannot be sustained under the wrong rule.

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