Personal hearing is required before imposing penalty, and denial of that opportunity can justify remand for fresh disposal.

Imposition of penalty under Rule 173Q(1) was held unsustainable where the adjudicating authority passed a substantial penal order without granting personal hearing or an effective opportunity to explain the case. The record showed that duty had already been paid and there had been some discussion with the department, but that did not replace the need for a formal hearing before penalty was imposed. The matter was therefore remanded for fresh disposal after giving the appellants a personal hearing and due opportunity to present their defence in accordance with law.

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Issues: Whether the order imposing penalty was liable to be set aside and the matter remanded for want of personal hearing and denial of opportunity to explain the case before the adjudicating authority.

Analysis: The appeal arose from confirmation of duty demand and imposition of penalty under Rule 173Q(1) of the Central Excise Rules, 1944. The record indicated that although the duty had been paid and there had been some discussion with the departmental , the adjudicating authority proceeded to impose a substantial penalty without extending a personal hearing. In the circumstances, an opportunity to present the appellants' case in person was considered necessary before such penal order was passed.

Conclusion: The appeal was allowed and the matter was remanded to the adjudicating authority for grant of personal hearing and fresh disposal according to law.

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