Separate apportionment of excise penalties under rule-based provisions and Section 11AC is required; composite penalty was unsustainable.

Penalties imposed under multiple provisions of the Central Excise Rules, 1944 and under Section 11AC of the Central Excise Act, 1944 must be separately apportioned according to the provision attracting each liability. A composite, undivided penalty covering Rule 9(2), Rule 52A, Rule 173Q, Rule 226, Rule 209A and Section 11AC was held unsustainable because the adjudicating authority had not distinguished the rule-based penalties from the statutory penalty under Section 11AC. The matter was remanded to the original authority for fresh determination and separate apportionment of penalty under the relevant provisions.

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Issues: Whether, where penalties were imposed under multiple provisions of the Central Excise Rules, 1944 and also under Section 11AC of the Central Excise Act, 1944, the penalty had to be apportioned separately and the matter remitted for fresh determination.

Analysis: The penalties had been imposed under Rule 9(2), Rule 52A, Rule 173Q, Rule 226 and Rule 209A of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act, 1944. In such a situation, the penalty could not be sustained as a single undivided amount. Separate apportionment was required for the penalties relatable to the rules and a distinct penalty had to be imposed under Section 11AC. The absence of such apportionment warranted interference.

Conclusion: The matter was remanded to the original authority for apportioning the penalty separately under the relevant rules and Section 11AC.

Ratio Decidendi: When penalties are imposed under multiple rule-based provisions and under Section 11AC, the adjudicating authority must separately apportion the penalty under each provision; a composite penalty without such segregation is unsustainable.

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