Unregistered manufacture of excisable goods attracts confiscation and penalty even without clearance from the factory.

Manufacture of excisable goods without obtaining or endorsing the required registration attracted confiscation and penalty under Rule 173Q(1)(c), because Rule 174(7) required each product to be endorsed on the registration certificate and the liability arose from unregistered manufacture itself, not from actual clearance of the goods. Objections based on prior registration for other products, the immovable character of the pipes, and cited precedents were rejected as inapplicable. The redemption fine and penalty were also upheld as not excessive, since they were modest compared with the value of the goods. The order confirming confiscation, redemption fine, and penalty was upheld.

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Issues: (i) Whether goods manufactured without applying for registration were liable to confiscation and penalty under the Central Excise Rules, 1944; (ii) whether the redemption fine and penalty imposed were excessive.

Issue (i): Whether goods manufactured without applying for registration were liable to confiscation and penalty under the Central Excise Rules, 1944.

Analysis: Rule 174(7) required particulars of each product manufactured by an assessee to be endorsed on the registration certificate. Since the pipes were not endorsed and were manufactured without registration, the liability under Rule 173Q(1)(c) was attracted. The rule was held to cover manufacture without registration itself and did not depend on actual clearance of the goods. The objections based on prior registration for other products, immovability of the pipes, and the cited precedents were rejected as inapplicable.

Conclusion: The goods were liable to confiscation and the manufacturer was liable to penalty.

Issue (ii): Whether the redemption fine and penalty imposed were excessive.

Analysis: The value of the pipes was about Rs. 6.50 lakhs, while the redemption fine of Rs. 30,000 and penalty of Rs. 5,000 were comparatively modest and not disproportionate.

Conclusion: The redemption fine and penalty were not excessive.

Final Conclusion: The order confirming confiscation, redemption fine, and penalty was upheld and the appeal failed.

Ratio Decidendi: Manufacture of excisable goods without obtaining or endorsing the required registration itself attracts confiscation and penalty under Rule 173Q(1)(c), irrespective of whether the goods were cleared from the factory.

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