Penalty for apparent PLA shortage rejected where duty was tendered and credited through the approved collecting bank.

Penalty under Rule 173Q of the Central Excise Rules was unwarranted where duty had been tendered through the approved collecting bank and credited, but a later bank date entry created only an apparent shortage in the PLA. The record showed that the cheque was received by the bank and credited on an earlier date, the discrepancy in the Bank of Maharashtra entry remained unexplained, and the approved collecting bank acted as the Department's agent for duty collection. The available balance in RG 23 Part-II also supported the absence of intentional evasion or improper clearance, so the penalty was set aside.

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Issues: Whether penalty under Rule 173Q of the Central Excise Rules was justified where duty payment had been tendered and credited but the bank date entry created an apparent shortage in the PLA.

Analysis: The record showed that the cheque had been tendered to the approved collecting bank and was credited by the State Bank of India on an earlier date, while the later date entered by the Bank of Maharashtra created a misleading impression that the appellants had cleared the goods without sufficient balance in the PLA. The discrepancy was unexplained by the bank, which was acting as the Department's approved agent for collection of excise duty. The records also showed availability of balance in RG. 23 Part-II, which further supported the view that there was no intentional evasion or improper clearance warranting penalty.

Conclusion: The penalty was not justified and was set aside in favour of the assessee.

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