Quantum of excise penalty reduced where traders sold goods without bills but no duty evasion was shown.

Penalty under the Central Excise Rules was examined only on quantum, as the shortage of goods and the levy of penalty on merits were not disputed. The traders had sold goods without bills, but the record did not show duty evasion, and the buyer had not claimed Modvat credit. Those circumstances justified a lenient view on punishment, leading to reduction of the penalty from Rs. 50,000 to Rs. 10,000, with adjustment of the pre-deposit already made.

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Issues: Whether the penalty imposed under the Central Excise Rules should be reduced in view of the appellants being traders and the absence of any duty evasion.

Analysis: The shortage of goods was admitted and the levy of penalty was not disputed on merits. The only question was whether the quantum of penalty called for interference. In the circumstances noted, the appellants were traders, the goods were sold without bills, and no duty evasion could be said to have been committed. The person to whom the goods were sold had also not claimed Modvat credit. These factors justified a lenient approach on the quantum of penalty.

Conclusion: The penalty was reduced from Rs. 50,000 to Rs. 10,000, with adjustment of the pre-deposit already made.

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