Mandatory excise record-keeping violations can justify confiscation and penalty even when goods are covered by invoices.

Failure to make mandatory excise record entries for goods found inside or outside the factory, including non-entry in RG-I and non-debit in PLA/RG 23A Part-II, can sustain confiscation and penalty even where invoices exist. The Tribunal treated the absence of proper accounting in prescribed records as a serious statutory lapse and rejected the view that invoices alone negate evasion. It accepted that a separate proof of clandestine removal or direct intent to evade is not always required where the record-keeping violation itself establishes duty evasion. The Commissioner (Appeals)'s finding of no evasion was reversed, and the order setting aside confiscation and penalty was held unsustainable.

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Issues: Whether goods found outside and inside the factory, though covered by central excise invoices, could still attract confiscation and penalty for non-entry in RG-I and non-debit in PLA/RG 23A Part-II without proof of actual clandestine removal or intent to evade duty.

Analysis: The goods in question were found without corresponding entries in the prescribed excise records, and the absence of RG-I and PLA/RG 23A Part-II debits was treated as a serious statutory lapse. The Tribunal held that the crucial circumstance was not merely the existence of invoices, but the failure to account for production and clearance in the mandatory records. Relying on the principle that an attempt at clandestine removal need not always be separately proved where the record-keeping violation itself establishes evasion, the Tribunal held that the Commissioner (Appeals) had erred in treating the invoices as sufficient to negate duty evasion.

Conclusion: The finding of no evasion was reversed, and the order setting aside confiscation and penalty was held unsustainable.

Final Conclusion: The Revenue's challenge succeeded, and the order of the Commissioner (Appeals) was set aside in full.

Ratio Decidendi: Failure to make mandatory excise record entries for goods cleared or kept ready for dispatch can establish evasion and justify confiscation and penalty, even where the goods are covered by invoices.

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