Confiscation overturned, penalty upheld for failure to record.

The Tribunal held that the confiscation of yarn found outside the bonded store room was not sustainable as the yarn was not in a readily marketable condition at the time of seizure. However, the imposition of a penalty for the non-entry of yarn in statutory records was upheld, as the appellant failed to record the yarn in the appropriate column despite it being required by law. The penalty was considered nominal given the value of the goods, and the appeal was disposed of accordingly.

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Issues:
1. Confiscation of yarn found outside the bonded store room.
2. Imposition of penalty for non-entry of yarn in statutory records.

Confiscation of Yarn:
The case involved the confiscation of yarn found outside the bonded store room by Central Excise Officers during a visit to the factory premises. The Sales Manager of the company stated that the yarn was meant for doubling and was not in a ready marketable stage. The Commissioner confiscated the yarn and imposed a penalty based on the evidence and submissions. The appellant argued that the goods were not in a marketable position at the time of seizure, citing various judgments to support the claim that goods not in a marketable condition cannot be considered ready for clandestine removal. Referring to a Trade Notice and the Sales Manager's statement, the appellant contended that the yarn in dispute was to be doubled before clearance, thus not requiring immediate entry in the R.G.1 Register. Consequently, the Tribunal held that confiscation of the yarn was not sustainable in law as it was not in a readily marketable condition at the time of seizure.

Imposition of Penalty:
Regarding the imposition of a penalty for non-entry of yarn in statutory records, the appellant was found to be clearing yarn in both single and double forms. The absence of entry of the yarn in the statutory records was considered a violation, justifying the imposition of a penalty. The Duty on yarn is required to be paid on single ply yarn form, and even if the yarn was not completely marketable, it should have been recorded in the appropriate column for semi-finished goods in the R.G.1 register. Since the entry was missing, the penalty was deemed warranted and sustainable in law. The Tribunal upheld the penalty, considering it nominal given the substantial value of the goods. The impugned order was modified to reflect the findings, and the appeal was disposed of accordingly.

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