Marketable excisable goods must be entered in RG-1; confiscation sustained, while fine and penalty were reduced.

Synthetic organic dyestuff stored outside the bonded store room and not entered in RG-1 was treated as fully manufactured, marketable excisable goods because the chemical report showed commercially distinct products with good dyeing properties; later blending for customer requirements was not part of manufacture. Confiscation for non-accountal was therefore sustained. The appellate authority, however, found the redemption fine, cash appropriation and penalty excessive on the facts, reduced the fine and cash appropriation, and set aside the penalty.

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Issues: (i) Whether the seized synthetic organic dyestuff had reached the stage of fully manufactured, marketable excisable goods so as to require entry in RG-1 and attract confiscation for non-accountal. (ii) Whether the redemption fine, cash appropriation, and penalty imposed on the appellants called for interference.

Issue (i): Whether the seized synthetic organic dyestuff had reached the stage of fully manufactured, marketable excisable goods so as to require entry in RG-1 and attract confiscation for non-accountal.

Analysis: The goods were found stored in drums outside the bonded store room and were not entered in RG-1 or EB-4. The Chemical Examiner reported that the samples contained mainly synthetic organic dyestuff with good dyeing properties and were marketable. On that basis, the goods were treated as commercially distinct finished excisable goods, and subsequent blending to suit individual customers was held not to be part of the completion of manufacture.

Conclusion: The seized goods were held to be fully manufactured excisable goods, and confiscation for contravention of the record-maintenance requirements was sustained.

Issue (ii): Whether the redemption fine, cash appropriation, and penalty imposed on the appellants called for interference.

Analysis: While upholding confiscation, the appellate authority considered the facts and circumstances and found the monetary consequences excessive. It therefore reduced the amount appropriated from the cash deposit and also reduced the redemption fine on the balance quantity. The penalty was not sustained.

Conclusion: The redemption fine and cash appropriation were reduced, and the penalty was set aside.

Final Conclusion: The appeal succeeded only to the extent of reduction of monetary consequences, while confiscation of the seized goods remained confirmed.

Ratio Decidendi: Goods that have emerged as marketable, commercially distinct excisable products are to be treated as finished goods for excise purposes, and failure to account for them in RG-1 renders them liable to confiscation, though the quantum of fine and penalty remains subject to appellate moderation.

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