Rule 26 penalty unwarranted where invoice omission was regularised and duty paid before penal action was sustained.

Penalty under Rule 26 of the Central Excise Rules was found unjustified where a senior manager's role was limited to signing clearance documents for scrap removed without invoice, and the omission was later regularised in the next invoice. The record showed that duty had been paid and the adjudicating authority itself had taken a lenient view. On those facts, the admitted lapse stood cured and the material did not support penal action against the appellant. The penalty was therefore set aside.

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Issues: Whether penalty under Rule 26 of the Central Excise Rules could be sustained against a senior manager who signed clearance documents for scrap removed without invoice, when the omission was later regularised and duty was paid.

Analysis: The appellant's role was confined to a clearance that was subsequently reflected in the next invoice, and the adjudicating authority itself accepted that the duty had been paid and that a lenient view was warranted. On those facts, the basis for visiting the appellant with penalty was weakened, because the admitted lapse stood regularised and the record did not justify penal action in preference to the explanation accepted by the authority below.

Conclusion: The penalty was not justified and was set aside.

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