Statutory records and proportionality in confiscation: accounted goods protected, unrecorded scrap penalised, and fines reduced.

Goods duly accounted for in statutory records could not be confiscated merely because the department described them differently, and the assessee was entitled to the benefit of doubt where no evidence showed unauthorised clearance. Unrecorded scrap goods, however, were rightly treated as a contravention because they were required to be entered in the prescribed register; the confiscation was sustained in principle, but the redemption fine and penalty were reduced because the value was small. Mere non-filing of a classification list, where the remaining goods were duly entered and lying in the factory, did not by itself justify confiscation.

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Issues: (i) whether the milk chiller or heat exchanger found in the factory was liable to confiscation for non-entry in the prescribed register; (ii) whether the scrap goods not entered in the prescribed register were liable to confiscation and the consequential penalty and redemption fine; (iii) whether the remaining goods were liable to confiscation for want of filing of a classification list.

Issue (i): whether the milk chiller or heat exchanger found in the factory was liable to confiscation for non-entry in the prescribed register.

Analysis: The goods were accounted for in the register, and no evidence showed that the item entered as milk chiller had been cleared or that the single article found was a different unrecorded item. In the absence of such evidence, the benefit of doubt had to go to the assessee.

Conclusion: The milk chiller or heat exchanger was not liable to confiscation and the finding was in favour of the assessee.

Issue (ii): whether the scrap goods not entered in the prescribed register were liable to confiscation and the consequential penalty and redemption fine.

Analysis: The scrap items were admittedly not entered in the register and were required to be accounted for under the excise records. This amounted to a contravention, though the value of the goods was very small, so the monetary consequences had to be kept in proportion to their value.

Conclusion: Confiscation was sustained in principle for the unrecorded scrap goods, but the redemption fine and penalty were reduced in favour of the assessee.

Issue (iii): whether the remaining goods were liable to confiscation for want of filing of a classification list.

Analysis: The remaining items were duly entered in the register and were available in the factory premises. Filing of a classification list was required before removal of the goods, and mere non-filing at that stage did not justify confiscation.

Conclusion: Confiscation of the remaining goods was not warranted and the finding was in favour of the assessee.

Final Conclusion: The order of confiscation was modified by upholding only the limited contravention relating to the unrecorded scrap items and by substantially reducing the monetary consequences, while protecting the recorded goods from confiscation.

Ratio Decidendi: Goods duly accounted for in statutory records and not shown to have been removed cannot be confiscated merely on a contrary description by the department, and where a procedural lapse is established in relation to low-value unrecorded goods, the monetary penalty must remain proportionate to the value involved.

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