Export proof default attracts Rule 14A penalty; harsher Rule 173Q requires proof of intent to evade duty.

Failure to furnish proof of export within the prescribed period after clearance under bond attracted Rule 14A of the Central Excise Rules, which specifically governed that default and limited the penalty to the prescribed ceiling. The harsher penalty under Rule 173Q could be invoked only where intent to evade duty was established, including the ingredient in Rule 173(d); absent such a finding, it was not justified. The penalty was therefore reduced to Rs. 2,000.

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Issues: Whether the penalty for failure to furnish proof of export under Rule 13 of the Central Excise Rules was governed by Rule 14A or whether the higher penalty under Rule 173Q could be invoked.

Analysis: The application arose from non-production of proof of export within the prescribed period after clearance of goods for export under bond. The applicable default attracted Rule 14A, which provided the penal consequence for failure to comply with the export-proof requirement and limited the penalty to the prescribed ceiling. Invocation of the harsher penalty under Rule 173Q required establishment of intent to evade duty, including the ingredient embodied in Rule 173(d). On the facts, no finding of intent to evade was recorded, and the demand itself had been partly dropped because extension of time had been granted in respect of some consignments.

Conclusion: Rule 14A alone applied, and the higher penalty under Rule 173Q was not justified. The penalty was reduced to Rs. 2,000/-.

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