Penalty under Rule 173Q failed where the notice omitted the specific clause and extended limitation allegation.

Penalty under Rule 173Q of the Central Excise Rules, 1944 could not be sustained where the show-cause notice invoked only Rule 173Q, did not specify the particular sub-clause alleged to have been contravened, and did not invoke the extended period under Section 11A of the Central Excise Act, 1944. The Tribunal noted that this omission failed to put the assessee properly on notice of the alleged contravention, and treated the absence of a specific allegation as giving the appellants a prima facie case. Penalty was therefore not imposable, and unconditional stay was granted pending further orders.

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Issues: Whether penalty under Rule 173Q of the Central Excise Rules, 1944 could be sustained when the show-cause notice did not invoke the extended period under Section 11A of the Central Excise Act, 1944 and did not specify the particular sub-clause allegedly contravened.

Analysis: The show-cause notice was found to invoke only Rule 173Q without identifying any specific sub-clause, and no extended period under Section 11A was involved. Relying on the Supreme Court decisions cited, the absence of invocation of the extended period and the failure to specify the precise clause of Rule 173Q meant that the assessee was not properly put to notice of the alleged contravention. On that basis, the Tribunal held that the appellants had a prima facie case.

Conclusion: Penalty was held not imposable, and unconditional stay was granted in favour of the appellants till further orders.

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