Rule 173Q penalty for invoice contravention requires clandestine removal or intent to evade duty; absent these, penalty fails.

Penalty under Rule 173Q of the Central Excise Rules, 1944 was examined in relation to invoice contraventions under Rule 52A. The text states that Rule 173Q was treated as applicable only where clandestine removal or contravention of the rules with intent to evade duty was established. On the recorded facts, no duty demand or evasion was found, and the authority had not proceeded under Rule 52A(8). The penalty was therefore regarded as unjustified and set aside in favour of the assessee.

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Issues: Whether penalty under Rule 173Q of the Central Excise Rules, 1944 could be sustained for contravention relating to invoices under Rule 52A of the Central Excise Rules, 1944 in the absence of clandestine removal or intention to evade duty.

Analysis: The penalty had been imposed under Rule 173Q only on the footing that Rule 52A had been contravened. The order also showed that the authority had consciously not proceeded under Rule 52A(8). On the facts found, there was no demand of duty and no evasion of duty established. Rule 173Q was treated as attracted only where there was clandestine removal or contravention of the rules with intent to evade duty, which was not made out on the record.

Conclusion: Penalty under Rule 173Q was not justified and was set aside in favour of the assessee.

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