Penalty for alleged clandestine removal upheld as deleted where factual nexus was not proved and no legal question arose.

Penalty under the Central Excise Rules was deleted because the Tribunal found no substantive or cogent material proving the respondent's nexus with alleged clandestine removal of branded gutka without invoice or duty payment. The High Court held that the Revenue's challenge did not disturb those factual findings and that the dispute turned entirely on evidence and factual inference, not on any debatable legal issue. The deletion of penalty was therefore upheld, and no substantial question of law arose for appellate interference.

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Issues: Whether the Tribunal was justified in deleting the penalty imposed on the respondent for alleged clandestine removal of excisable goods and whether any substantial question of law arose from the Tribunal's factual findings.

Analysis: The penalty had been imposed on the basis that the respondent was connected with alleged clandestine clearance of branded gutka products without invoice and without payment of duty. The Tribunal found no substantive or cogent material establishing the alleged nexus or the respondent's involvement, and therefore set aside the penalty. The High Court noted that the challenge raised by the Revenue did not dislodge the Tribunal's factual appreciation and that the controversy turned entirely on evidence and factual inferences, not on any debatable question of law.

Conclusion: The deletion of penalty was upheld and no substantial question of law was held to arise. The appeal failed.

Ratio Decidendi: Where penalty under the Central Excise Rules is deleted on a factual finding that the alleged clandestine removal and the assessee's nexus are not proved by substantive material, no substantial question of law arises for interference in appeal.

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