Penalty under Cenvat Credit rules requires specific notice of the exact contravention; vague allegations cannot sustain the penalty.

Penalty under Rule 13 of the Cenvat Credit Rules, 2002 cannot be sustained unless the show-cause notice and adjudication order specifically identify the clause and exact nature of the alleged contravention. The record showed that no precise clause was invoked, so the assessee was not put on notice of the specific charge and could not meet it effectively. On that basis, the penalty was held not leviable and the impugned order was set aside in favour of the assessee.

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Issues: Whether penalty under Rule 13 of the Cenvat Credit Rules, 2002 was leviable when the show-cause notice and adjudication order did not specify the exact clause or nature of contravention.

Analysis: The record showed that no specific clause of Rule 13 was invoked in the show-cause notice or in the adjudication order to put the assessee on notice of the precise contravention alleged. In penalty matters, the assessee must be clearly informed of the exact basis on which penalty is proposed so that the defence can meet the charge. In the absence of such specific attribution, the binding principle applied was that penalty cannot be sustained.

Conclusion: Penalty was not leviable; the impugned order was set aside in favour of the assessee.

Ratio Decidendi: A penalty under Rule 13 of the Cenvat Credit Rules, 2002 cannot be sustained unless the show-cause notice and adjudication order specifically disclose the clause and exact nature of the alleged contravention.

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