Limitation plea barred in remand after not being pressed earlier; penalty under Central Excise Rules reduced as excessive.

A limitation plea not pressed in the earlier round and not raised before the adjudicating authority in remand cannot be entertained afresh in subsequent proceedings, especially where the remand was confined to issues already under consideration; the plea was therefore rejected. Penalty under the Central Excise Rules was examined on a proportional basis and found excessive on the facts, so interference was warranted and the penalty was reduced from Rs. 10 lakh to Rs. 10,000.

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Issues: (i) Whether the appellant could reopen and succeed on the plea of limitation in the remand proceedings after having not pressed the point earlier; (ii) Whether the penalty imposed under the Central Excise Rules warranted interference.

Issue (i): Whether the appellant could reopen and succeed on the plea of limitation in the remand proceedings after having not pressed the point earlier.

Analysis: The limitation plea had not been pursued in the earlier proceedings and was not raised before the adjudicating authority in remand. The earlier remand was confined to the issues then considered, and the plea could not be introduced afresh at that stage. The reliance placed on the cited Supreme Court decision was held inapplicable on the facts, as the present matter did not involve the same procedural setting or denial of opportunity.

Conclusion: The limitation plea was not entertained and was rejected.

Issue (ii): Whether the penalty imposed under the Central Excise Rules warranted interference.

Analysis: The penalty was imposed under Rule 9(2) read with Rule 173Q of the Central Excise Rules, 1944. Having regard to the facts and the appellant's status, the penalty was found to be excessive. The reasoning applied a proportional approach to penalty while distinguishing the cited authorities relied upon by the appellant.

Conclusion: The penalty was reduced from Rs. 10 lakh to Rs. 10,000.

Final Conclusion: The appeal failed on the limitation issue but succeeded in part on penalty, resulting in only a partial allowance of the appeal.

Ratio Decidendi: A limitation plea not pressed in the earlier round and not raised before the adjudicating authority in remand cannot be entertained afresh in subsequent proceedings, and penalty may be reduced where the original quantum is found excessive on the facts.

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