Specific notice of charge is essential before imposing penalty under a different excise rule.

Penalty under Rule 96ZQ(5)(ii) of the Central Excise Rules, 1944 could not be sustained where the show cause notice had invoked only Rule 96ZQ(6) read with Rule 173Q. The notice and the adjudication proceeded on distinct defaults and distinct penalties: Rule 96ZQ(6) concerned non-accountal and clandestine clearance, while Rule 96ZQ(5)(ii) related to delayed payment of duty. Because the notice did not specifically charge the assessee under Rule 96ZQ(5)(ii), the assessee was not informed of the precise allegation or possible consequence. The penalty was therefore set aside and the Revenue's challenge failed.

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Issues: Whether penalty under Rule 96ZQ(5)(ii) of the Central Excise Rules, 1944 could be sustained when the show cause notice invoked only Rule 96ZQ(6) read with Rule 173Q of the Central Excise Rules, 1944.

Analysis: The show cause notice proposed penalty only under Rule 96ZQ(6) read with Rule 173Q, while the adjudicating authority imposed a different penalty under Rule 96ZQ(5)(ii). The two provisions dealt with distinct defaults and distinct penalties, one relating to non-accountal and clandestine clearance and the other to delayed payment of duty. In such circumstances, invocation of the specific provision in the notice was necessary so that the noticee knew the precise charge and potential penalty. In the absence of a specific charge under Rule 96ZQ(5)(ii), the penalty could not validly be imposed.

Conclusion: The penalty under Rule 96ZQ(5)(ii) was rightly set aside and the Revenue's challenge failed.

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