2003 (11) TMI 540 - AT - Central Excise

Summary

Issues: Imposition of penalty under Rule 173Q for non-accountal and clandestine removal of aerated waters; Proper accounting for wastage during manufacture of aerated water.

In this case before the Appellate Tribunal CESTAT, New Delhi, the main issue revolved around the imposition of a penalty under Rule 173Q for non-accountal and clandestine removal of aerated waters. The appellant's counsel argued that the Commissioner had dropped the charge of suppression of production and clandestine removal after examining the records, making the penalty imposition unjustified. The counsel contended that since the allegation of clandestine removal was dropped, the penalty under Rule 173Q for non-accountal could not stand. The Tribunal noted that the penalty was imposed based on the show cause notice alleging non-accountal and suppression of production, but since the charge of clandestine removal was dropped, the penalty could not be upheld as per the contents of the notice. The Tribunal found the penalty imposition unjustified and set aside the order in favor of the appellant.

Another issue raised was the proper accounting for wastage during the manufacture of aerated water. The Departmental Representative supported the Commissioner's order, arguing that there was a failure to account for the details of wastage during manufacturing. However, the Tribunal focused on the specific allegations in the show cause notice and concluded that since there was no proposal in the notice to impose a penalty under Rule 173Q for non-accountal of raw materials, the penalty imposed by the Commissioner could not be sustained. The Tribunal allowed the appeals, set aside the impugned order, and ruled in favor of the appellants, highlighting the importance of adhering to the specifics of the show cause notice in penalty imposition decisions.