Opinion by

James Brasco (Claimant) appeals from a decision of the Workmens Compensation Appeal Board which affirmed the referees decision to dismiss Gee Bee Furnitures (Employer) petition for termination and reversed the referees decision to assess a 10% penalty against Employer pursuant to Section 435 of The Pennsylvania Workmen's Compensation Act. 1 The issue presented for review 2 is whether the Board committed an error of law in reversing the referees decision to assess a penalty against Employer.

Claimant was employed as a truck driver/warehouseman for Employer and performéd duties including moving and lifting of heavy furniture. On July 7, 1980, Claimant suffered a work-related injury diagnosed as acute traumatic lumbar disc syndrome which rendered him disabled. Pursuant to notice of compensation payable, Claimant began receiving total disability benefits on July 15, 1980. On November 8, 1982, Employer filed a petition for termination based upon an affidavit of recovery and an automatic supersedeas was taken. 3 See Section 413 of the Act, 77 PS. §772. 4

*566 At a hearing before the referee on January 10, 1983, Claimant challenged the affidavit of recovery as being defective since Dr. Sherman, author of the affidavit, did not sign it before a notary. N.T., p. 7. Dr. Sherman admitted in his deposition that he did not execute the physicians affidavit in the presence of a notary but instead gave the unsigned report to a party from rehabilitation services to have it notarized. N.T., p. 14. Based upon the evidence, the referee found:

. . . [T]hat the defendant illegally secured an automatic supersedeas on this case. Dr. Sherman executed a physicians affidavit of recovery on August 26, 1982. However, he did not appear before a person authorized to administer oaths and the affidavit was subscribed by Lisa McCormick outside of his presence.

Finding of Fact No. 11. The referee concluded that a 10% penalty shall be imposed pursuant to Section 435.* *** 5

*567 The Board reversed the referee because no evidence existed to show that the Employer violated the Act or rules of the Department of Labor or the Board. This Court disagrees. However, the Board correctly stated that a referee may not assess a penalty without a hearing on the issue, but failed to remand to the referee. Claimant, nonetheless, contends that the referee acted properly in assessing the penalty pursuant to Section 435. Before penalties may be imposed, it is well established that notice and a hearing must first be afforded the person involved in the noncompliance. Crangi Distributing Co. v. Workmen's Compensation Appeal Board, 17 Pa. Commonwealth Ct. 530, 333 A.2d 207 (1975).

Claimant asserts that Employers due process rights have been adequately protected; that Employer was on constant notice of its failure to conform with the Act; that the issue was discussed at the January 10, 1983 hearing; and that the Employer had an opportunity to defend against its noncompliance at the September 28, 1983 hearing.

Claimant misinterprets the legislative intent of Section 435. This Court has held in Crangi that:

*568 Not only does a reading of section 435 in its entirety indicate the Legislatures intention that notice and hearing be provided on the issue of violations, an interpretation which would allow the imposition of penalties for asserted violations without notice and opportunity to be heard would render the proceedings unfair and therefore constitutionally infirm.

Crangi at 535, 333 A.2d at 210. While recognizing that no penalty may be imposed under Section 435(d) absent proof of a violation, this Court concludes that substantial evidence exists in the record to support the finding of the referee, as ultimate factfinder, that the Employer unlawfully secured an automatic supersedeas. The Board máy not substitute its own-findings for those of the referee. Universal Cyclops Steel Corp. v. Krawczynski, 9 Pa. Commonwealth Ct. 176, 305 A.2d 757 (1973). Moreover, the Board incorrectly relied upon this Courts holding in Edmond v. Workmen's Compensation Appeal Board (Devon Apparel, Inc.), 68 Pa. Commonwealth Ct. 482, 449 A.2d 827 (1982) which involved the failure of an employer to provide a list of five treating physicians pursuant to Section 306(f) of the Act, 77 PS. §531. Section 306(f) placed no obligation on the employer to provide the list, and as a result, a penalty assessment against the employer was refused. Unlike the Edmond case, however, the Employer here was required to comply with applicable provisions of the Act.

Therefore, the Board committed an error of law in reversing the referees finding of noncompliance by the Employer and imposition of a penalty. Although the referee properly found noncompliance, this Court holds that the Employer is entitled to a penalty hearing pursuant to the automatic supersedeas provisions of Section 413. 6 Accordingly, the decision of the Board is vacated *569 and this case is remanded for proceedings consistent with this opinion.

Order

And Now, this 15th day of August, 1988, the order of the Workmen's Compensation Appeal Board is vacated and this case remanded for further proceedings consistent with this opinion.

Jurisdiction relinquished.