Technical RG1 non-entry without clandestine removal evidence cannot sustain confiscation or major penalty under excise rules.

Non-entry of goods in RG1, without evidence of clandestine removal, mala fides, or other supporting material, was treated as a technical procedural infraction rather than conduct warranting confiscation. On that basis, confiscation and penalty under Rule 173Q were held unsustainable, and the appropriate response was only the limited procedural penalty contemplated by Rule 226. Penalty under Rule 209A also failed because there were no specific allegations or evidence establishing its essential ingredients.

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Issues: Whether goods not entered in the RG1 register, in the absence of material showing clandestine removal or mala fides, could be confiscated and penalised under Rule 173Q, and whether penalty under Rule 209A was sustainable.

Analysis: The only omission found was delayed or incomplete accountal of goods in the statutory records. The record did not show clandestine non-duty-paid removal, and the basic books and private records were available at the time of search. The violation was treated as technical in nature. On that footing, confiscation and penalty under Rule 173Q were held unwarranted, while the limited remedy contemplated for such procedural infraction was under Rule 226. The penalty under Rule 209A also failed for want of specific allegations and supporting material showing the requisite ingredients.

Conclusion: The penalties and confiscation under Rule 173Q were not justified, and the challenge to the Commissioner (Appeals)' order failed.

Ratio Decidendi: Where non-entry in RG1 reflects only a technical infraction and there is no evidence of clandestine removal or mala fides, confiscation and penalty under Rule 173Q are not sustainable; the matter, at most, attracts the limited procedural penalty contemplated by Rule 226.

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