Penalty for RG 1 non-entry reduced after Tribunal considered unfinished goods and factory-removal explanation.

Penalty for non-entry of goods in the RG 1 register was reduced because the Tribunal found the levy excessive in light of the nature of the fabrics, the duty payable, and the explanation that the goods were not ready for despatch and had not left the factory. Grounds relating to the Kar Vivad Samadhan Scheme, 1998 were not entertained because refusal to extend that scheme was not appealable. The penalty was therefore scaled down, while the remainder of the order was confirmed.

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Issues: Whether the penalty imposed for non-entry of goods in the RG 1 register was sustainable and, if so, to what extent it should be reduced.

Analysis: The Tribunal declined to entertain the grounds relating to the Kar Vivad Samadhan Scheme, 1998, as refusal to extend the benefit of that scheme was not appealable. On the only surviving issue, the Tribunal took into account the nature of the fabrics, the duty payable on them, and the explanation that the goods were not ready for despatch and had not been removed from the factory.

Conclusion: The penalty was held to be excessive and was reduced from Rs. 2,45,310 to Rs. 2,00,000, while the rest of the order was confirmed.

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