Wrong rule citation does not defeat excise penalty where facts establish contravention under the correct provision.

A penalty for non-maintenance and delayed posting of excise records was sustained because a wrong rule citation does not invalidate action where the facts disclose a contravention under the correct enabling provision. The contravention was treated as falling within Rule 173Q of the Central Excise Rules, 1944, which permits confiscation and penalty for removal of excisable goods in breach of the rules, while arguments confining the matter to Rule 173G(4), Rule 53 or Rule 226 were rejected. The authority on technical or venial breaches was held inapplicable. However, the penalty was found excessive on the facts and reduced in favour of the assessee.

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Issues: Whether the penalty imposed for non-maintenance and delayed posting of excise records under the relevant rules was sustainable, and whether the quantum of penalty required reduction.

Analysis: The notice and adjudication were held sustainable even though the appellant sought to rely on other rules, because a wrong reference to a rule does not prevent the authorities from supporting the action under the correct provision when the facts disclose a contravention. The contravention was treated as falling within Rule 173Q of the Central Excise Rules, 1944, which covers removal of excisable goods in violation of the rules and provides for confiscation and penalty. The plea that the case was confined to Rule 173G(4), Rule 53 or Rule 226 was rejected, and the cited authority on technical or venial breaches was held inapplicable on the facts. At the same time, the penalty amount was found to be excessive on the facts and circumstances.

Conclusion: The invocation of Rule 173Q and the finding of contravention were upheld, but the penalty was reduced from Rs. 10,000 to Rs. 7,000 in favour of the assessee.

Final Conclusion: The appeal succeeded only to the extent of reduction in penalty, while the adverse finding on liability was maintained.

Ratio Decidendi: A proceeding is not vitiated merely because the wrong rule is cited, if the facts establish a contravention falling within the correct enabling provision, and the penalty may be interfered with where it is found excessive.

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