Penalty under Rule 173Q cannot be invoked against a trader outside the specified categories; interim relief granted.

A trader purchasing goods from a manufacturer was held not to fall within Rule 173Q of the Central Excise Rules, 1944, because the penalty provision was understood to apply to a manufacturer, producer or warehouse keeper. On that basis, the Tribunal found the proposed penalty not maintainable against the applicants in the facts presented and granted waiver of pre-deposit with stay of recovery. The operative principle stated was that a penalty provision confined to specified categories of persons cannot be invoked against a trader who does not fall within those categories.

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Issues: Whether a trader, as distinct from a manufacturer, producer or warehouse keeper, fell within the ambit of Rule 173Q of the Central Excise Rules, 1944 for the purpose of penalty, and whether waiver of pre-deposit and stay of recovery were warranted.

Analysis: The applicants were described as traders purchasing goods from the manufacturer. The penalty notice was issued under Rule 173Q, but the provision was understood to apply to a manufacturer, producer or warehouse keeper. On that basis, the Tribunal accepted the contention that the applicants did not fall within the class of persons contemplated by the rule for imposition of penalty at this stage.

Conclusion: The applicants were held not to be covered by Rule 173Q for the proposed penalty, and waiver of pre-deposit together with stay of recovery was granted.

Final Conclusion: Interim relief was granted in favour of the applicants on the ground that the penalty provision was not shown to apply to a trader in the facts presented.

Ratio Decidendi: A penalty provision limited to specified categories of persons cannot be invoked against a trader who does not fall within those categories.

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