2008 (12) TMI 484 - AT - Central Excise

Summary

The Appellate Tribunal CESTAT, CHENNAI, in the 2008 (12) TMI 484 - CESTAT, CHENNAI case, heard an appeal regarding penalties imposed under the Central Excise Act. The impugned order upheld penalties under Section 11AC of the Act, applicable interest under Section 11AB, and a Rs. 20,000 penalty under Rule 25 of the Central Excise Rules, 2002 (CER). The appellants had paid the duty evaded with interest before the Show Cause Notice. The appeal challenged the penalties under Section 11AC and Rule 25, but the appellant's proprietor focused on the Rule 25 penalty. He argued that CBEC instructions prohibit Rule 25 penalties when Section 11AC penalties apply. The JDR cited a Supreme Court judgment that penalties cannot be less than the evaded duty in clandestine clearance cases. The judge found that when equal penalties are imposed under Section 11AC, Rule 25 penalties are unnecessary, and thus, the appeal was partly allowed by overturning the Rule 25 penalty. The decision was dictated and pronounced in open court.