Extended limitation, director penalty and cumulative penalties in excise demand were tested against the facts and specific charge requirement.

Admitted shortage of finished excisable goods, with duty liability undisputed and already deposited in the PLA, was treated as sufficient to sustain invocation of the extended period; the demand was held not barred by limitation. Penalty on the director was unsustainable because the notice and original order contained no specific allegation against him and no evidence linked him to the alleged removal; that penalty was set aside. Simultaneous penalties under Section 11AC and the rules were considered unnecessary and excessive on the facts, so the rule-based penalty was deleted while the duty demand and Section 11AC penalty were sustained, granting partial relief.

---

---

Issues: (i) whether the demand notice was barred by limitation and whether the extended period could be invoked; (ii) whether penalty could be imposed on the director in the absence of a specific charge; (iii) whether simultaneous penalties under Section 11AC and the rules were warranted.

Issue (i): Whether the demand notice was barred by limitation and whether the extended period could be invoked.

Analysis: The shortage of finished excisable goods was admitted, the duty liability on the shortage was not disputed, and the amount had already been deposited in the PLA. The notice alleged clandestine removal and non-accountal, and the reference to the date of departmental knowledge could not defeat the notice in the circumstances of the case.

Conclusion: The demand was not barred by limitation and the invocation of the extended period was upheld, against the assessee.

Issue (ii): Whether penalty could be imposed on the director in the absence of a specific charge.

Analysis: No specific allegation was made against the director in the notice or in the original order, and he was not shown to have been present at the time of verification or otherwise linked to the alleged removal.

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

Issue (iii): Whether simultaneous penalties under Section 11AC and the rules were warranted.

Analysis: On the facts found, imposition of both a penalty under Section 11AC and a separate penalty under the rules was considered unnecessary and excessive.

Conclusion: The separate penalty under the rules was set aside, while the remaining liability was sustained.

Final Conclusion: The duty demand and the penalty under Section 11AC were sustained, but the separate rule-based penalty on the company and the penalty on the director were deleted, resulting in partial relief to the assessee.

Ratio Decidendi: A penalty cannot be sustained against a person in the absence of a specific charge linking that to the alleged contravention, and cumulative penalties must be justified on the facts and statutory scheme.

---