RG 1 records for non-excisable goods were held unnecessary where separate waste and scrap accounts were maintained.

RG 1 is a register meant for excisable goods, so a direction requiring its maintenance for goods held non-excisable was inconsistent with the Central Excise Rules. Separate accounts showing generation, stock, and clearance of waste, scrap, and cut pieces were sufficient for departmental verification, and the insistence on RG 1 compliance for such goods was deleted in favour of the assessee.

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Issues: Whether the direction requiring maintenance of RG 1 accounts and separate records for waste, scrap, and cut pieces was sustainable when the goods were held to be non-excisable.

Analysis: RG 1 is a register meant for excisable goods. Where the goods in question are not excisable, there is no warrant to insist upon maintaining their accounts in that prescribed format. If the assessee maintains separate accounts showing generation, stock, and clearance of waste and scrap, the department has sufficient facility for verification. A direction requiring RG 1 compliance for non-excisable goods was inconsistent with the scheme of the Central Excise Rules and adversely affected the assessee.

Conclusion: The impugned direction was unsustainable and was deleted in favour of the assessee.

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