2009 (6) TMI 774 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of stay of recovery in respect of penalty imposed under Rule 25 of the Central Excise Rules, 2002.

Analysis:
The judgment revolves around the issue of waiver of pre-deposit and stay of recovery concerning a penalty imposed under Rule 25 of the Central Excise Rules, 2002. The appellant had paid duty with interest before the issuance of the show-cause notice, seeking waiver of pre-deposit in relation to a penalty of Rs. 22,000 imposed on them under Rule 25. The show-cause notice proposed penalties under Rule 25 and Rule 27 of the Central Excise Rules, read with Section 11AC of the Central Excise Act, 1944. The original authority invoked Rule 25(2) after determining that Section 11AC was not applicable to the case, a decision upheld by the Commissioner (Appeals).

The crux of the argument presented by the appellant's counsel was that, based on the case's facts, no penalty should have been imposed under Rule 25. It was contended that since no specific sub-rule of Rule 25 was mentioned in the show-cause notice, invoking sub-rule (2) without factual findings was impermissible. Legal precedents, including Ucal Fuel Systems Ltd v. Commissioner of Central Excise, Chennai, and Commissioner of Central Excise & Customs, Daman v. Al-Amin Exports, were cited to emphasize the necessity of notifying the assessee of the contravention leading to penalty under Rule 25.

The absence of any contrary binding case law was noted by the tribunal. After considering the arguments and finding a prima facie case in favor of the appellant regarding the penalty, the tribunal granted waiver of pre-deposit and stay of recovery concerning the penalty amount. The decision was made after a thorough examination of the records and arguments presented by both sides, ensuring compliance with legal principles and precedents.

In conclusion, the judgment meticulously analyzed the appellant's plea for waiver of pre-deposit and stay of recovery in relation to a penalty imposed under Rule 25, addressing the legal intricacies surrounding the invocation of specific sub-rules, compliance with procedural requirements, and the application of relevant legal precedents to reach a well-reasoned decision in favor of the appellant.