Non-accountal of factory goods alone cannot justify redemption fine absent evidence of intent to evade duty.

Goods found within the factory but not entered in the RG 1 register were treated as a lapse in statutory accounting, but confiscation and penalty under Rule 173Q were examined against the absence of any clear finding of intent to remove the goods without duty payment. Mere non-accountal, without evidence of duty evasion, was held insufficient to justify redemption fine, and that fine was set aside. The confiscation and penalty were otherwise sustained. The order also noted that Rule 49(4) had been omitted from 20-5-1994 by Notification No. 23/94-C.E. (N.T.).

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Issues: Whether redemption fine was justified for goods found unaccounted in the RG 1 Register, and whether the order of confiscation and penalty should be interfered with.

Analysis: The goods were found within the factory but not entered in the statutory records. The order under Rule 173Q was examined in the light of the nature of the lapse and the absence of a clear finding of any attempt to remove the goods without payment of duty. The Tribunal noted that confiscation and penalty depend upon the facts and circumstances of each case and that mere non-accountal, without evidence of intent to evade duty, does not by itself justify redemption fine. The order of the Commissioner (Appeals) also accepted that Rule 49(4) had been omitted with effect from 20-5-1994 by Notification No. 23/94-C.E. (N.T.).

Conclusion: Redemption fine was not justified and was set aside. The confiscation and penalty orders were otherwise upheld.

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