Penalty for incorrect duty declaration not sustainable where rules did not expressly penalise the inaccuracy under Rule 173Q.

Penalty under Rule 173Q of the Central Excise Rules, 1944 was held unsustainable where the assessee had filed classification lists and paid duty on the basis of a tariff publication that contained a misprint, resulting in an incorrect duty rate being declared. The tribunal applied the principle that Rule 173Q does not automatically punish mere incorrectness in a declaration unless the rules expressly make that inaccuracy a penal contravention. On that reasoning, the omission to state the correct rate was not treated as a contravention of Rules 173B, 173F or 173I for penalty purposes, and the penalty was set aside.

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Issues: Whether penalty under Rule 173Q of the Central Excise Rules, 1944 was sustainable where the assessee had declared an incorrect rate of duty on the goods and the alleged contraventions were of Rules 173B, 173F and 173I.

Analysis: The assessee had filed classification lists and paid duty on the basis of the rate shown in a trade tariff publication, and the incorrect rate was attributed to a misprint. The governing principle applied was that penalty under Rule 173Q is not attracted merely because the declaration made by the assessee was incorrect if the Rules do not expressly penalise such incorrectness. On the reasoning adopted from the cited precedent, the omission to state the correct rate of duty was not treated as a contravention of Rule 173B within the meaning of Rule 173Q, and the same reasoning extended to Rules 173F and 173I.

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

Final Conclusion: The appeal succeeded to the extent of deleting the penalty imposed under Rule 173Q, while the duty demand itself was not the subject of challenge.

Ratio Decidendi: Where the rules do not expressly provide for penalty for merely furnishing an incorrect rate or other incorrect information, such inaccuracy does not by itself constitute a penal contravention under Rule 173Q.

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