Clandestine removal under the self-removal scheme attracts penalty despite later duty payment after detection.

Penalty under Rule 173Q was upheld where excisable goods were removed for several months without entry in statutory records and without payment of duty before clearance. Payment of duty only after detection, and before the show cause notice, did not cure the earlier contravention or negate the culpable default, particularly under the self-removal scheme requiring the manufacturer to assess and discharge duty before removal. Authorities cited by the assessee were distinguished because they involved different facts and did not concern clandestine removal of finished goods. The Tribunal applied the principle that statutory default attracts penalty unless the provision indicates otherwise.

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Issues: Whether penalty was imposable under Rule 173Q of the Central Excise Rules where excisable goods were removed without accounting in statutory records and duty was paid only after detection, before the show cause notice.

Analysis: The removal of goods for several months without entry in the prescribed records and without payment of duty was admitted. Payment of duty after detection did not erase the earlier contravention or the guilty intent, especially under the self-removal scheme which places trust on the manufacturer to determine and discharge duty before clearance. The case law relied upon by the appellant was distinguished on facts, as those matters involved different factual situations and did not involve clandestine removal of finished goods. The Tribunal also relied on the principle that where the statute makes a person liable, the existence of default is enough for penalty unless the provision indicates otherwise.

Conclusion: Penalty under Rule 173Q was rightly imposed and the appeal failed.

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