Penalty under Rule 25 requires clear notice of the exact contravention; vague reliance on Section 11AC could not stand.

Penalty under Rule 25 of the Central Excise Rules, 2002 cannot be sustained where neither the show-cause notice nor the adjudication order identifies the specific clause or precise contravention alleged. Because Rule 25 contains distinct grounds for penalty, the affected person must be told the exact breach to meet the case effectively. The penalty was also linked to Section 11AC of the Central Excise Act, 1944, although the Commissioner found that Section 11AC did not apply since no demand had been raised or confirmed under Section 11A(1) or Section 11A(2). With the legal basis left undefined, the penalty was set aside.

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Issues: Whether penalty imposed under Rule 25 of the Central Excise Rules, 2002 was sustainable when neither the show-cause notice nor the adjudication order specified the particular clause or precise contravention relied upon.

Analysis: Rule 25 contains distinct clauses dealing with different situations, and a person proceeded against must be informed of the exact nature of the alleged breach so that an effective defence may be made. The order sustaining penalty did not identify the specific clause of Rule 25 that was attracted. The penalty was also linked to Section 11AC of the Central Excise Act, 1944, although the Commissioner himself found that Section 11AC was not applicable because no demand had been raised or confirmed under Section 11A(1) and Section 11A(2) of the Central Excise Act, 1944. In these circumstances, the basis of the penalty remained undefined and the order could not be sustained.

Conclusion: The penalty under Rule 25 was not sustainable and was set aside.

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