Penalty remains valid despite wrong rule reference where Rule 96ZO(3) clearly authorises the excise penalty.

A penalty imposed under Rule 96ZO(3) of the Central Excise Rules, 1944 was not vitiated merely because Rule 173Q was also mentioned. The Tribunal held that the earlier decision had been misread and that the relevant penalty order and show cause notice clearly invoked the substantive provision authorising action under Rule 96ZO(3). The additional or incorrect reference to another rule did not nullify the penalty where the operative basis for the levy was apparent from the record. The setting aside of the penalty was therefore unsustainable, and the penalty under Rule 96ZO(3) remained valid.

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Issues: Whether penalty imposed under Rule 96ZO(3) of the Central Excise Rules, 1944 was liable to be set aside merely because Rule 173Q of the Central Excise Rules, 1944 was also mentioned.

Analysis: The appellate authority had relied on an incorrect reading of the earlier Tribunal decision and on the premise that the present management was not liable for acts of the predecessor. The order also treated the reference to Rule 173Q as fatal. The Tribunal found that the earlier decision had been misquoted, that the relevant reasoning there was different, and that the penalty in the present case had been specifically imposed under Rule 96ZO(3). The mere additional mention of Rule 173Q did not nullify the penalty when the substantive provision supporting the action was clearly invoked.

Conclusion: The setting aside of penalty was unsustainable; the penalty under Rule 96ZO(3) remained valid despite the reference to Rule 173Q.

Ratio Decidendi: A penalty does not fail merely because an additional or incorrect rule is mentioned, if the order and show cause notice clearly invoke the substantive provision authorising the penalty.

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