Unrebutted factory gate pricing defeats excise penalty where transport and processing charges were not shown includible.

Penalty under Rule 173Q for alleged excise contravention was held unsustainable because the assessee's claim that the factory gate price was the same for both units remained unrebutted. On that basis, transport and processing charges for PVC sheets sent for printing and embossing could not be treated as separately includible in the assessable value. With no controverted material showing breach of the Central Excise Act or Rules, the foundation for penalty failed and the penalty was set aside.

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Issues: Whether penalty imposed for alleged contravention of the Central Excise Rules was sustainable when the assessee's stand that the factory gate price was the same for the two units and that transport and processing charges were not includible was not controverted.

Analysis: The penalty had been imposed under Rule 173Q of the Central Excise Rules on the footing that PVC sheets received from one unit for printing and embossing were transported and processed without the transport and processing charges being included in the value of the final product. The assessee's case that the factory gate price of the PVC goods was the same from both plants and that, therefore, no question arose of adding those charges remained unrebutted. In the absence of any controverted material showing breach of the Central Excise Act and Rules, the foundation for penalty did not survive.

Conclusion: The penalty was not sustainable and was set aside.

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