Specific statutory notice is essential for central excise penalty; duty and interest issues were remanded for fresh adjudication.

A penalty under Central Excise law cannot be sustained where the show cause notice fails to specify the relevant clause of Rule 173Q on which penalty is proposed; the assessee succeeded on that issue. The demand of duty under Section 11A and the levy of interest under Section 11AB were found to require fresh consideration, and those matters were remanded to the Tribunal for de novo adjudication, with the contention on the non-applicability of Section 11AB left open for determination.

---

---

Issues: (i) Whether penalty under the Central Excise law could be sustained when the show cause notice did not specify the relevant clause of Rule 173Q of the Central Excise Rules, 1944; (ii) whether the demand of duty under Section 11A and the levy of interest under Section 11AB required fresh consideration by the Tribunal.

Issue (i): Whether penalty under the Central Excise law could be sustained when the show cause notice did not specify the relevant clause of Rule 173Q of the Central Excise Rules, 1944.

Analysis: The penalty depended on the notice specifically indicating the provision under which it was proposed. Since the show cause notice did not identify the relevant clause of Rule 173Q on the basis of which penalty was sought, the penalty could not be justified on that footing.

Conclusion: The penalty was not sustainable and the assessee succeeded on this issue.

Issue (ii): Whether the demand of duty under Section 11A and the levy of interest under Section 11AB required fresh consideration by the Tribunal.

Analysis: The Tribunal's approach to these matters was found to be unsatisfactory, and the issues were directed to be reconsidered de novo. The contention regarding the non-applicability of Section 11AB at the relevant time was left open for consideration before the Tribunal.

Conclusion: The duty and interest issues were remanded for de novo consideration.

Final Conclusion: The assessee obtained relief on the penalty issue, while the demand of duty and the question of interest were sent back for fresh adjudication.

Ratio Decidendi: A penalty under the Central Excise law cannot be sustained unless the show cause notice clearly specifies the statutory provision on which the proposed penalty is founded.

---