2009 (6) TMI 799 - AT - Central Excise

Summary

Issues:
1. Appeal against order-in-appeal for enhancing penalty under Rule 173Q(1).
2. Interpretation of Rule 173Q(1) regarding minimum penalty imposable.
3. Consideration of upper limit of penalty under Rule 173Q(1).

Analysis:
1. The appeal was filed by the Revenue against the order-in-appeal dismissing the Department's appeal for enhancing the penalty imposed on the respondent under Rule 173Q(1) to Rs. 5,000. The Department argued that the minimum penalty imposable for contraventions covered under Clauses (a), (b), and (c) of Rule 173Q(1) is Rs. 5,000. The Departmental Representative cited a previous Tribunal's order to support this contention.

2. The Tribunal analyzed Rule 173Q(1) of the Central Excise Rules, 1944, which states that the penalty imposable for contraventions mentioned in the rule is "an amount not exceeding three times the value of the excisable goods or Rs. 5,000, whichever is greater." The Tribunal noted that the rule specifies an upper limit of the penalty that can be imposed for such contraventions. The Tribunal clarified that the rule does not mandate a minimum penalty of Rs. 5,000 for contraventions under Clauses (a), (b), and (c) as argued by the Department. The Tribunal referred to a previous case to support its interpretation.

3. The Tribunal emphasized that the wording of Rule 173Q(1) does not indicate a fixed minimum penalty of Rs. 5,000 for contraventions under specific clauses. The Tribunal highlighted that the rule sets an upper limit for the penalty, and the imposition of the penalty should be based on the circumstances of each case. The Tribunal dismissed the Revenue's appeal, stating that the Department's argument would have been valid if the rule had specified a fixed penalty amount rather than an upper limit. The Tribunal's decision was in line with previous rulings on similar matters.

This analysis provides a detailed overview of the issues involved in the legal judgment, the arguments presented by the parties, and the Tribunal's interpretation of the relevant legal provisions.