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Issues: (i) Whether confiscation of goods could be sustained under Rule 226 of the Central Excise Rules, 1944 when the show cause notice proposed confiscation only under Rule 173Q of the Central Excise Rules, 1944; (ii) whether the penalty of Rs. 2,000 under Rule 226 of the Central Excise Rules, 1944 could be sustained.
Issue (i): Whether confiscation of goods could be sustained under Rule 226 of the Central Excise Rules, 1944 when the show cause notice proposed confiscation only under Rule 173Q of the Central Excise Rules, 1944.
Analysis: The notice issued to the appellants proceeded only on Rule 173Q of the Central Excise Rules, 1944. No notice invoking Rule 226 of the Central Excise Rules, 1944 was served. An order sustaining confiscation on a provision not put to notice travels beyond the scope of the show cause notice.
Conclusion: The confiscation under Rule 226 of the Central Excise Rules, 1944 is not sustainable and is set aside.
Issue (ii): Whether the penalty of Rs. 2,000 under Rule 226 of the Central Excise Rules, 1944 could be sustained.
Analysis: The appellants did not contest the penalty under Rule 226 of the Central Excise Rules, 1944, and no separate infirmity in that part of the order was established.
Conclusion: The penalty of Rs. 2,000 under Rule 226 of the Central Excise Rules, 1944 is upheld.
Final Conclusion: The order was interfered with only to the extent of confiscation, while the monetary penalty was maintained.
Ratio Decidendi: An adjudicatory order cannot sustain confiscation on a statutory provision not invoked in the show cause notice, though an uncontested penalty may be maintained independently.
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