9911796707
TMI Blog1997 (8) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... 87 for the period from 4-12-1986 to 31-3-1987 by the Superintendent of Central Excise. Subsequently, however, a revised show cause notice dated 30-6-1988 covering the period from 11-4-1986 to 31-3-1987 was issued by the Additional Collector. This show cause notice mentions that it includes the period already covered in the show cause notice issued by the Superintendent of Central Excise. The Additional Collector in his order demanded excise duty at standard rates for the clearance of goods during the period 1-4-1986 to 30-6-1986 in respect of cheese winding machines. He also confirmed differential duty on the value of electric motors and cheese winding machines which were cleared after Notification 46/81 was rescinded. 2. Arguing for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 1-3-1986 or to pay excise duty at the standard rate in case they had not fulfilled the condition specified in this Notification. He goes on to record that the appellants continued to avail exemption under Notification 46/81 even when it was rescinded and, therefore, they are not eligible to SSI exemption. After having recorded all this, while proceeding to impose penalty, the Additional Collector records "I keep in view that the Unit is a small scale unit and in any case would be eligible for small scale concession had they resorted to following the proper procedure". We are constrained to note that this is not a correct proposition of law. A substantive benefit otherwise available under law cannot be nullified through a procedural irregu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso to Section 11A are totally absent here. We also note that the Additional Collector has not quantified the extent of short levy involved and yet has gone on to impose a penalty of Rs. 25,000/-. Penalty is a measure of gravity of offence and has to bear a direct relationship to the extent of the gravity. Penalty, therefore, without quantifying the duty could not have been levied as such. Since we have held that the demand itself raised through the show cause notice dated 30-6-1988 for the period 11-4-1986 to March, 1987 is time barred, the penalty also in these circumstances is not sustainable and is, therefore, set aside.
5. In view of this we set aside the impugned order and allow the appeal. X X X X Extracts X X X X X X X X Extracts X X X X
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