Penalty notice defect cured where factual violation is clear and the assessee understands the offence alleged.

Penalty under Rule 25 of the Central Excise Rules, 2002 is not vitiated merely because the show cause notice omits the exact rule or sub-clause, where the factual basis of the alleged violation is clearly stated and the assessee understands the nature of the offence. The notice here disclosed admitted stock shortage and sale of duty-paid goods without invoices, showing failure to account for and properly dispose of the goods. In those circumstances, no prejudice was caused by the omission, and the authorities cited on defective notices were distinguished on facts. The penalty was therefore treated as sustainable.

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Issues: Whether penalty under Rule 25 of the Central Excise Rules, 2002 could be sustained when the show cause notice did not specifically invoke that rule or the relevant sub-clause.

Analysis: The appellant, a registered dealer, was required to account for duty-paid goods received and to dispose of them only in the manner permitted by the rules. The shortage in stock was admitted, and the goods were also stated to have been sold without bills. The failure to issue invoices and to account for disposal of the goods disclosed the nature of the violation. In such circumstances, mere non-mention of the exact rule or sub-rule in the notice did not cause prejudice, since the ingredient of the offence was clearly set out. The reliance placed on authorities dealing with notices that failed to specify the applicable clause was distinguished on facts.

Conclusion: The penalty imposed under Rule 25 of the Central Excise Rules, 2002 was valid and required no interference.

Ratio Decidendi: Where the notice clearly discloses the factual violation and the assessee understands the nature of the offence, omission to specify the exact rule or sub-rule does not invalidate the penalty.

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