2006 (4) TMI 395 - AT - Central Excise

Summary

Issues:
Challenge against penalty imposition under Rule 173Q of the Central Excise Rules, 1944.

Analysis:
The appellants contested the penalty imposed on them under Rule 173Q of the Central Excise Rules, 1944. Upon reviewing the submissions and records, it was noted that the show cause notice did not specify any particular sub-rule of Rule 173Q for which the penalty was being imposed. Similarly, the order-in-original did not mention the specific sub-rule under which the penalty was levied on the appellants. This lack of specificity in identifying the contravention was a crucial point of contention.

The judgment referred to a case where the Hon'ble Supreme Court ruled that it is essential for the assessee to be informed of the exact nature of the contravention under Rule 173Q. The Court emphasized that since Rule 173Q contains multiple clauses with differing contents, the assessee must be notified of the specific clause allegedly contravened. Failure to provide such clarity renders the imposition of penalty invalid. This ruling set a precedent for cases involving penalties under Rule 173Q.

Given that the appellants solely disputed the penalty imposition under Rule 173Q and not any other findings, the Tribunal found that the issue at hand aligned with the Supreme Court's decision in the referenced case. Consequently, the Tribunal concluded that the penalty imposition lacked the necessary specificity and, following the Supreme Court's ruling, set aside the order-in-appeal. The Tribunal allowed the appeal to the extent that the penalty under Rule 173Q was overturned, highlighting the importance of adherence to procedural requirements and the principle of natural justice in penalty impositions under the Central Excise Rules, 1944.