Penalty for short duty payment upheld where irregular depot pricing showed disregard of law and supported intention to evade duty.

Penalty under Rule 173Q was sustained because the short payment of duty arose from an irregular clearance procedure based on depot and part-wise pricing, while assessment and RT-12 returns were required to reflect duty at the factory stage. The conduct was not treated as a mere inadvertent error: there was no material showing regular departmental acceptance of depot invoices, and the adopted method involved disregard of law and procedure. Detection of the short levy by the department later did not erase culpability. Although departmental inaction was a mitigating factor, the gravity of the conduct supported an inference of intention to evade duty, and no reduction of penalty was warranted.

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Issues: Whether the penalty imposed under Rule 173Q was liable to be set aside or reduced on the ground that the short payment of duty occurred without any intention to evade duty.

Analysis: The appellant followed an irregular procedure by clearing goods on the basis of depot and part-wise price arrangements, but the assessment and RT-12 returns were to reflect the duty payable at the factory stage. The short payment was not shown to be a mere inadvertence; no material established any regular departmental submission of depot invoices, and the procedure adopted involved disregard of law and procedure. The fact that the department later detected the short levy did not negate the culpability. Although the departmental inaction was a mitigating circumstance, the gravity of the conduct supported the finding of intention to evade duty.

Conclusion: The penalty under Rule 173Q was upheld and no reduction was warranted.

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