Minimum penalty under Rule 173Q fixed at Rs. 5,000, while Rule 209A cannot extend to unrelated contraventions.

CESTAT considered reduction of redemption fines and penalties under Central Excise Rules. The reduced redemption fines were sustained because the appellate authority exercised discretion by linking the amount to the market value of the confiscated goods, and the Revenue did not dispute that nexus. On Rule 173Q, the Tribunal held that the minimum penalty is Rs. 5,000, following Bharat Petroleum Corporation Ltd., and treated contrary views as no longer valid; the lower penalties were therefore increased to that minimum on each count. The appeal against the partner failed because the alleged contraventions were not covered by Rule 209A, which applies to abetment involving goods liable to confiscation.

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Issues: (i) Whether penalties against the partner could be sustained under Rule 209A of the Central Excise Rules, 1944. (ii) Whether the penalty under Rule 173Q(1) of the Central Excise Rules, 1944 could be reduced below the prescribed minimum of Rs. 5,000.

Issue (i): Whether penalties against the partner could be sustained under Rule 209A of the Central Excise Rules, 1944.

Analysis: Rule 209A applies to abetment through dealing with goods liable to confiscation. The finding recorded for the partner was that the alleged contraventions did not fall within that category, and no ground was shown to take a different view.

Conclusion: The penalty on the partner under Rule 209A was not sustainable and the Revenue's appeal on this issue failed.

Issue (ii): Whether the penalty under Rule 173Q(1) of the Central Excise Rules, 1944 could be reduced below the prescribed minimum of Rs. 5,000.

Analysis: The minimum penalty under Rule 173Q(1) was held to be Rs. 5,000 in the binding Division Bench decision relied upon. The contrary view taken in an earlier Single Member decision was treated as per incuriam because it did not notice that binding precedent. The later view consistent with the Division Bench ruling was applied, making it clear that a penalty below Rs. 5,000 could not be sustained.

Conclusion: The reduced penalties of Rs. 2,000 each were unsustainable and were enhanced to Rs. 5,000 on each count.

Final Conclusion: The challenge to the order deleting the partner's penalty was rejected, while the challenge to the reduced penalties on the firm succeeded to the extent of restoring the statutory minimum penalty.

Ratio Decidendi: Under Rule 173Q(1) of the Central Excise Rules, 1944, the prescribed penalty of Rs. 5,000 operates as the minimum where penalty is otherwise leviable.

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