Optional excise procedure cannot be compelled; penalty for not adopting Rule 56C was set aside.

Rule 56C of the Central Excise Rules, 1944 was an optional procedure for the assessee, and the excise authorities could not compel its adoption by unilateral direction. Because the department's own position on the rule was uncertain and duty could continue under the normal procedure, the assessee's decision not to opt in could not attract penalty. The penalty orders were therefore unsustainable and were set aside, with the consolidated appeals succeeding.

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Issues: Whether the appellants could be penalised for not opting to work under rule 56C of the Central Excise Rules, 1944, and whether the procedure under that rule could be compelled by the department.

Analysis: Rule 56C conferred an option on the assessee to avail the benefit of the procedure. The department itself had shown uncertainty about the applicability of the rule and had not taken immediate remedial steps. Since the rule was optional, the assessee could not be compelled to adopt it by a unilateral decision of the excise authorities, and duty could continue to be paid under the normal procedure prescribed by the Rules.

Conclusion: The penalties imposed on the appellants were unsustainable and were set aside.

Final Conclusion: The consolidated appeals succeeded and the penalty orders passed against the appellants were annulled.

Ratio Decidendi: Where a statutory procedure is couched as an option for the assessee, the authorities cannot compel its adoption or impose penalty merely because that optional procedure was not chosen.

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