2006 (1) TMI 491 - AT - Central Excise

Summary

Issues: Penalty imposition under erstwhile Central Excise Rule 173Q without invoking extended period under Section 11A.

Analysis:
The case involved a dispute regarding the imposition of a penalty under the erstwhile Central Excise Rule 173Q without invoking the extended period under Section 11A. The appellant's representative argued that the Commissioner disallowed Modvat credit, but the extended period was not invoked in the show cause notice. The appellant relied on the decision of the Hon'ble Supreme Court in the case of P & B Pharmaceuticals (P) Ltd. v. Collector of Central Excise, where it was held that penalty under Rule 173Q cannot be imposed if the extended period is not invoked. The appellant also cited the Tribunal's decision in the case of Blue Star Ltd. v. Commr. of Central Excise, Vadodara, supporting their argument. Additionally, the appellant pointed out a previous order of the Tribunal in their own case where a similar view was taken. Therefore, the appellant requested a stay on the penalty.

On the other hand, the Revenue's representative supported the Commissioner's order, stating that the penalty was correctly imposed under Rule 173Q of the Central Excise Act, 1944. However, upon hearing both sides, the Tribunal noted that no extended period under Section 11A was involved in the case. Citing the Hon'ble Supreme Court's decision in Amrit Foods v. Commr. of Central Excise, the Tribunal emphasized the importance of specifying the exact nature of contravention in the show cause notice. As the show cause notice in this case did not specify any sub-clause under Rule 173Q, the Tribunal found the case in favor of the appellants. Relying on the Supreme Court's decision, the Tribunal granted an unconditional stay on the penalty until further orders, concluding the judgment in the open court.