Record-maintenance penalties under Central Excise Rules fail where no valid notification imposed the disputed obligation.

Penalties for alleged failure to maintain records and returns under the Central Excise Rules, 2002 were held unsustainable because the assessee was already filing the prescribed statutory return and the disputed record-maintenance requirement was not backed by any valid notification under Rule 12. The earlier Central Excise Rules, 1944 had contained a specific record provision, but that obligation was not shown to have been carried forward in the manner asserted by the department. In the absence of an enforceable duty to keep the disputed records, the penalty basis failed and the penalties were set aside.

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Issues: Whether penalties were imposable for alleged failure to maintain the records and returns said to be required under the Central Excise Rules, 2002 and the departmental circular.

Analysis: The assessee was found to be filing the statutory return prescribed under the Central Excise Rules, 2002, while the record-maintenance requirement relied upon by the department was not supported by any notification under Rule 12. The earlier regime under the Central Excise Rules, 1944 contained a specific provision for such records, but that requirement was not shown to have been carried forward into the new rules in the manner alleged in the impugned order. In the absence of a validly enforced obligation to maintain the disputed records, the basis for penalty could not survive.

Conclusion: The penalties were not sustainable and were set aside in favour of the assessee.

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