Invalidated penalty provisions cannot sustain a penalty order once the underlying rule is struck down.

A penalty imposed under Rule 96ZQ of the Central Excise Rules, 1944 could not survive after the Supreme Court declared the rule, together with the allied interest and penalty provisions, invalid. Once that legal foundation disappeared, the basis for sustaining the penalty order also failed, and the impugned penalty could not be maintained. The order was quashed and set aside, and the petitioner was treated as entitled to refund of any amount already paid, with interest as directed.

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Issues: Whether the penalty imposed under Rule 96ZQ of the Central Excise Rules, 1944 could survive after the Supreme Court declared that rule invalid.

Analysis: The petition challenged the penalty imposed under Rule 96ZQ. The prior view sustaining the penalty on the footing that the rule was mandatory could not stand once the Supreme Court held that Rule 96ZQ, along with the allied interest and penalty provisions, was invalid. In that situation, the foundation for the penalty order disappeared and the impugned penalty could not be sustained.

Conclusion: The penalty order was quashed and set aside, and the petitioner was held entitled to refund of any amount already paid with interest as directed.

Ratio Decidendi: A penalty imposed under a rule declared invalid by the Supreme Court cannot be sustained, and any order founded solely on such rule must fail.

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