2008 (1) TMI 737 - AT - Central Excise

Summary

Issues:
Imposition of penalty under Rule 25 of Central Excise Rules, 2002 for violation of Cenvat Credit Rules.

Analysis:
The appellant filed an appeal against the penalty imposed under Rule 25 of Central Excise Rules, 2002 for violating the Cenvat Credit Rules. The case involved the appellant clearing exempted goods without reversing the credit on the inputs as required by Rule 6(3)(b) of the Cenvat Credit Rules, 2002. The Central Excise Officers discovered this irregularity during a visit to the appellant's factory on 31st December, 2003. The appellant promptly rectified the situation by reversing the amount under Rule 6(3)(b) of the rules. The Commissioner (Appeals) noted that the officers detected the irregularities during their visit and concluded that there was no intent to evade duty since the clearance of exempted goods was documented. The show cause notice highlighted the alleged irregularity detected during record scrutiny, leading to the conclusion that there was no suppression of facts with the intent to evade duty.

The judgment delves into the legal aspect of the case, focusing on Clause (d) of Sub-rule (1) of Rule 25 of Central Excise Rules, 2002, which pertains to the imposition of penalties for contravention of the rules with the intent to evade duty payment. The show cause notice proposed a penalty for the violation of rules, but the judgment determined that there was no violation with the intent to evade payment of duty. Consequently, the penalty under Rule 25 of the Rules was set aside. The appeal was allowed, providing the appellant with consequential relief. The decision was dictated and pronounced in open court, bringing the matter to a close.