Bona fide clerical lapse defeats excise penalty where records showed no intent to evade duty.

Penalty under Rule 173Q(1)(d) of the Central Excise Rules, 1944 was held unsustainable where duty had been reflected in the gate passes and relevant registers, and the omission to debit the personal ledger account was accepted as a bona fide clerical lapse. The record did not show mala fide conduct or any intent to evade duty, so the breach was treated as technical rather than deliberate. On that basis, the penal order was set aside and the assessee succeeded.

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Issues: Whether the penalty imposed under Rule 173Q(1)(d) of the Central Excise Rules, 1944 was justified when the failure to debit duty in the personal ledger account was stated to be a clerical lapse and there was no intention to evade duty.

Analysis: The record showed that the duty columns in the gate passes had been filled and the related entries were made in the relevant registers, supporting the explanation that the omission to make the debit entry in the personal ledger account was a bona fide clerical error. The lapse was treated as a technical breach rather than a mala fide act, and the absence of any intention to evade duty was accepted. In such circumstances, penalty was not warranted.

Conclusion: The penalty was unjustified and was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the penal order did not survive.

Ratio Decidendi: Penalty under Rule 173Q(1)(d) of the Central Excise Rules, 1944 cannot be sustained where the default is a bona fide clerical lapse without mala fide intention or intent to evade duty.

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