Excise penalty limits cannot be exceeded, and liability cannot rest on a rule not in force during the relevant period.

A penalty under the Central Excise Rules, 1944 could not be sustained at an amount above the maximum permitted by the applicable provisions, and it could not be imposed under Rule 209 when that rule was not in force during the relevant period. The authority therefore lacked jurisdiction to uphold the excessive penalty. The penalty was set aside to the extent it exceeded the statutory limits and was substituted with penalties confined to the maxima prescribed under Rules 9(2), 52A(5) and 226.

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Issues: Whether the penalty imposed under the Central Excise Rules, 1944 could exceed the maximum penalties prescribed by the applicable rules and whether penalty could be sustained under Rule 209 when that rule was not in force during the relevant period.

Analysis: Rule 209 had been omitted long before the period of alleged clandestine removal and was reintroduced only later. The remaining invoked provisions prescribed specific maximum penalties far below the amount imposed. The authority therefore lacked jurisdiction to sustain a penalty of Rs. 40,00,000 under those rules.

Conclusion: The excessive penalty was not sustainable. It was set aside and substituted by penalties within the statutory maxima under Rules 9(2), 52A(5), and 226 of the Central Excise Rules, 1944.

Final Conclusion: The appeal succeeded to the extent of reducing the penalty to the amounts permitted by the governing rules.

Ratio Decidendi: A penalty under fiscal rules cannot exceed the maximum prescribed by the applicable provision, and a penalty cannot be imposed under a rule that was not in force during the relevant period.

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