Penalty under Central Excise Rules requires the same charged provision in notice and order, with facts fitting the invoked rule.

Penalty under the Central Excise Rules cannot be sustained unless the facts squarely fit the invoked provision and the same penal basis is set out in the notice and applied in the order. A registered dealer was found outside Rule 173Q(1)(bb) and Rule 173Q(1)(d) because the provisions did not cover the alleged facilitation of inadmissible credit on the facts recorded, and Rule 173Q(1)(bbb) could not be relied on when it was neither alleged nor applicable on the version then in force. Penalties on the connected appellants also failed because the notice proceeded under Rule 173Q while the order imposed penalty under Rule 209A, causing a mismatch in the foundation for penalty.

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Issues: (i) Whether penalty on a registered dealer was sustainable under Rule 173Q(1)(bb) and Rule 173Q(1)(d) of the Central Excise Rules, 1944 for issuing invoices without actual movement of goods or for facilitating buyers to take inadmissible credit. (ii) Whether penalties on the other appellants could be sustained when the show cause notice proposed action under Rule 173Q but the impugned order imposed penalty under Rule 209A of the Central Excise Rules, 1944.

Issue (i): Whether penalty on a registered dealer was sustainable under Rule 173Q(1)(bb) and Rule 173Q(1)(d) of the Central Excise Rules, 1944 for issuing invoices without actual movement of goods or for facilitating buyers to take inadmissible credit.

Analysis: Rule 173Q(1)(bb) applies where the enumerated persons wrongfully take credit, fail to take reasonable steps regarding duty-paid inputs, or contravene the specified provisions. The appellant, being a registered dealer, did not fall within those ingredients on the facts found. The invocation of Rule 173Q(1)(bbb) was also unavailable because it was neither alleged in the notice nor the basis of penalty, and in any event the provision then in force did not extend to facilitation of additional duty credit. Rule 173Q(1)(d) was inapplicable because no duty liability was cast on the dealer and the clause did not cover mere abetment or facilitation.

Conclusion: Penalty on the registered dealer was not sustainable and was set aside.

Issue (ii): Whether penalties on the other appellants could be sustained when the show cause notice proposed action under Rule 173Q but the impugned order imposed penalty under Rule 209A of the Central Excise Rules, 1944.

Analysis: The notice and the adjudication order proceeded under different penal provisions. Since Rule 209A is materially distinct from Rule 173Q, penalty could not be sustained on a basis not proposed in the notice. The change of provision deprived the appellants of a proper foundation for the penalty.

Conclusion: The penalties on the other appellants were also unsustainable and were set aside.

Final Conclusion: The penalties could not be upheld either against the registered dealer or against the connected appellants, and the appeals succeeded in full.

Ratio Decidendi: A penalty under the Central Excise Rules cannot be sustained unless the facts squarely satisfy the invoked penal provision and the same provision is the one proposed in the notice and applied in the order.

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