Composite excise penalty requires clear apportionment; undivided penalty under Rule 173Q and Section 11AC was set aside.

A composite penalty imposed jointly under Rule 173Q of the Central Excise Rules and Section 11AC of the Central Excise Act was held unsustainable because no apportionment was shown between the two provisions. The duty liability was not in dispute, and interest under Section 11AB was affirmed for the relevant period until payment of duty. The penalty was therefore set aside, while the duty demand and interest liability were upheld.

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Issues: Whether the penalty imposed under Rule 173Q of the Central Excise Rules read with Section 11AC of the Central Excise Act was sustainable in the absence of apportionment, and whether the duty-related interest was payable.

Analysis: The penalty was held unsustainable because the amount was imposed jointly under Rule 173Q and Section 11AC without indicating apportionment between the two provisions. Following the earlier Tribunal view relied upon in the order, such a composite penalty could not be upheld. The duty liability was not disputed, and the interest liability under Section 11AB was affirmed for the period from 28-9-1996 till payment of duty.

Conclusion: The penalty was set aside, while the duty demand and interest liability were upheld.

Ratio Decidendi: A composite penalty imposed under Rule 173Q and Section 11AC is not sustainable unless the penalty is apportioned between the two provisions.

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