Penalty for nil RT-13 returns was held unwarranted where there was no production or clearance and no revenue prejudice.

Penalty for failure to file RT-13 returns was held unwarranted where the unit had nil production and nil clearances, and the returns concerned only nil filings. The lapse under Rule 173Q(1) read with Rule 210 of the Central Excise Rules, 1944 was found to have caused no serious consequence to revenue, so the penal action was not justified. The assessee succeeded on this issue.

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Issues: Whether penalty was sustainable for failure to file RT-13 returns for a period when the unit had nil production and nil clearances.

Analysis: The penalty had been imposed under Rule 173Q(1) read with Rule 210 of the Central Excise Rules, 1944. The returns related to a period when there was no production or clearance, and the returns were only nil returns. In these circumstances, the lapse did not cause any serious consequence to revenue and the imposition of penalty was not warranted.

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

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