Functus officio bars later penalty notice after final adjudication closed duty demand without any penalty proposal.

Where an earlier show cause notice and adjudication order finally dealt with duty recovery without proposing or confirming penalty, the department could not later reopen the same matter by issuing a fresh penalty notice under the Central Excise Rules. The Tribunal applied the functus officio principle and held that, once the original proceeding had culminated in adjudication, the authority lacked jurisdiction to revive penalty proceedings after a long delay. The subsequent penalty notice and order were therefore unsustainable, and the penalty order was set aside.

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Issues: Whether a subsequent show cause notice proposing penalty could be issued after the earlier show cause notice and adjudication order had already concluded the matter without any proposal or confirmation of penalty.

Analysis: The dispute concerned penalty proceedings initiated long after the original duty-related notice and adjudication. The earlier notice alleged duty evasion and was confined to duty recovery under Rule 9(2) of the Central Excise Rules, 1944, without any proposal to invoke penal provisions. The adjudication order also did not impose penalty. On that basis, the later notice proposing penalties under Rule 173Q and Rule 209A of the Central Excise Rules, 1944 was treated as a reopening of an already concluded matter. The Tribunal applied the principle that once the original proceeding had culminated in an adjudication order, the authority became functus officio and could not revive penalty proceedings after an extended lapse of time.

Conclusion: The subsequent penalty notice was without jurisdiction and unsustainable, and the penalty order was set aside.

Final Conclusion: The appeal succeeded on the ground that penalty proceedings could not be initiated after the original adjudication had concluded the matter without any penal proposal or finding.

Ratio Decidendi: Where an earlier show cause notice and adjudication order conclusively deal with a duty demand without proposing or confirming penalty, the department cannot later reopen the same matter by issuing a fresh penalty notice after long delay; the authority becomes functus officio.

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