Specific excise penalty under Rule 191B(6) cannot exceed the rule-based limit when goods are unavailable for confiscation.

A specific excise penalty under Rule 191B(6) governed diversion of goods procured for manufacture and export when the export condition was not fulfilled and duty was later paid. Because the goods were not available for confiscation and no recorded finding justified departing from the rule's express limit, a higher penalty could not be sustained. The penalty was therefore restricted to Rs. 2,000 under Rule 191B(6), and the larger penalty was set aside, leaving the order otherwise undisturbed.

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Issues: Penalty for diversion of goods procured under Rule 191B of the Central Excise Rules and the extent of penalty payable when the goods were not available for confiscation.

Analysis: The goods were procured for manufacture and export under Rule 191B, but the exported condition was not fulfilled and duty was subsequently paid. Rule 191B(6) specifically provided for penalty and confiscation. Since the goods were not available for confiscation, and there was no recorded finding justifying a penalty beyond the specific limit under that rule, the matter had to be governed by the express penalty provision in Rule 191B(6) rather than by a higher penalty regime.

Conclusion: The penalty was restricted to Rs. 2,000 under Rule 191B(6), and the larger penalty was set aside.

Final Conclusion: The appeal succeeded to the limited extent of reduction of penalty, while the order was otherwise maintained.

Ratio Decidendi: Where a specific excise rule prescribes a maximum penalty and the goods are not available for confiscation, a higher penalty cannot be sustained in the absence of a recorded finding warranting departure from that specific rule.

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