2009 (10) TMI 691 - AT - Central Excise

Summary

Issues involved: Imposition of penalty under Rule 27 of Central Excise Rules, 2002 for breach of Rule 20.

The judgment by the Appellate Tribunal CESTAT BANGALORE addresses the controversy surrounding the imposition of penalty under Rule 27 of Central Excise Rules, 2002 for the breach of Rule 20. The appellant argues compliance with the requirement of submitting a re-warehousing certificate, contending that no penalty should be imposed for a non-existent breach of law. On the other hand, the Revenue asserts that a breach cannot go unpunished as per the mandate of Rule 27.

The learned Commissioner (Appeals) found that the appellant received the re-warehousing certificate beyond the stipulated 90-day period. However, the reason for the delay was not addressed in the appellate order. Given the absence of a provision for mandatory penalty and the appellant's delay not being attributed to any unlawful or malicious intent, it is deemed that the appellant should be absolved from the penalty prescribed by Rule 27. The language of the said Rule does not appear to mandate mandatory imposition of penalty for every breach, especially when the breach is not deliberate or wilful, and does not result in defiance of the law. The appeal is allowed, setting aside the impugned order, as it is established that mere technical breaches should not automatically lead to penalty imposition in the absence of a statutory mandate under Rule 27 of Central Excise Rules, 2002. This decision aligns with the precedent set by the Apex Court in the case of State of Madhya Pradesh v. Bharat Heavy Electricals.