Confiscation and penalty not justified for a 100% export unit keeping goods in factory for export, with no duty evasion.

Confiscation, redemption fine and penalty were held unwarranted for a 100% export oriented unit because the goods remained in the factory for export, the unit was not required to maintain RG-I under the applicable Board circular, and no element of duty evasion arose. The intermediate product had already been subjected to duty and the duty was accepted and paid, so the basis for penal action was absent. The confiscation, redemption fine and penalty were therefore rightly set aside.

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Issues: Whether confiscation of goods, redemption fine, and penalty were justified where the assessee was a 100% export oriented unit not required to maintain RG-I register and the goods were lying in the factory for export.

Analysis: The assessee was a 100% EOU and, according to Board's Circular No. 212/46/96-C.X. dated 20-5-1996, was not required to maintain the RG-I register. The goods were still in the factory and were meant for export, so the element of duty evasion did not arise. The duty on the intermediate product had already been accepted and paid.

Conclusion: The confiscation of goods, redemption fine, and penalty were not warranted and were rightly set aside.

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