2010 (3) TMI 980 - Commissioner - Central Excise

Summary

Issues:
- Appeal against imposition of penalty under Rule 25 of Central Excise Rules.
- Contravention of SEZ Rules, 2006.
- Appellant's liability to pay penalty.

Analysis:

1. Imposition of Penalty under Rule 25 of Central Excise Rules:
The case involved an appeal against the imposition of a penalty under Rule 25 of the Central Excise Rules. The appellant contended that the penalty could only be imposed if there was a contravention of the provisions listed in the said rule. The Commissioner observed that Rule 25 pertains to contravention of provisions or notifications issued under the Central Excise Rules. In this case, the appellant cleared goods under Rule 30 of SEZ Rules, 2006, seeking exemption from duty. As the Joint Commissioner did not establish any contravention of SEZ Rules, the penalty under Rule 25 could not be justified. Therefore, the penalty imposed was deemed unsupported by law.

2. Contravention of SEZ Rules, 2006:
The appellant argued that any contravention, if at all, was under Rule 30 of SEZ Rules, 2006, and not under the Central Excise Rules. The Commissioner agreed with this contention, emphasizing that the penalty under Rule 25 is applicable only in cases of contravention of Central Excise Rules. Since the appellant had followed the procedures under SEZ Rules and not violated any provisions under the Central Excise Rules, the imposition of penalty was considered unjustified.

3. Appellant's Liability to Pay Penalty:
The Commissioner further examined the merits of the case to determine the appellant's liability to pay the penalty. It was noted that the appellant had cleared goods under the exemption provided by Rule 30 of SEZ Rules, supported by ARE-1s. Despite efforts to obtain re-warehousing certificates within the stipulated period, the appellant faced delays at the destination point. There was no indication of diversion of goods for other purposes. The Commissioner acknowledged the appellant's genuine efforts to comply with the requirements but faced challenges beyond their control. Consequently, the imposition of a penalty on the appellant was deemed unsustainable, and the appeal was allowed by setting aside the original order.

In conclusion, the Commissioner ruled in favor of the appellant, setting aside the penalty imposed under Rule 25 of the Central Excise Rules, citing the absence of contravention of SEZ Rules and the appellant's sincere efforts to comply with the necessary procedures despite facing delays beyond their control.