2015 (12) TMI 1636 - AT - Central Excise

Impposition of penalty u/r 25 - Held that - none of the ingredients itemized in Rule 25 of the Rules have any application in the present case justifying imposition of penalty - Though non-payment of duty within the stipulated time frame is a contravention of the statutory provisions but in absence of any proof regarding the involvement of the respondent in any fraudulent activity concerning fraud collusion suppression etc. with intent to evade payment of duty imposition of penalty is not justified - appeal dismissed - decided against Revenue.

Summary

Issues:
Imposition of penalty under Rule 25 of the Central Excise Rules, 2002 for non-deposit of duty liability within stipulated time frame.

Analysis:
The appeal concerns the imposition of a penalty under Rule 25 of the Central Excise Rules, 2002 for the non-deposit of duty liability within the stipulated time frame. The appellant, the Revenue, contested the impugned order that set aside the penalty of Rs. 13,89,000/- imposed on the respondent. The appellant argued that the respondent failed to deposit the admitted duty liability for September 2006 and October 2006, justifying the penalty under Rule 25. The respondent, represented by Sh. Rama Kant Kothari, explained that their factory was closed since October 2006, leading to difficulties in depositing only Rs. 10,00,000/- towards the duty liabilities. The respondent highlighted that the Department held the excisable goods, hindering their ability to sell and generate funds for duty payment.

The Tribunal heard both sides and examined the records. It was observed that while non-payment of duty within the stipulated time frame is a statutory contravention, the absence of evidence implicating the respondent in fraudulent activities like fraud, collusion, or suppression with intent to evade duty payment rendered the penalty unjustified. The Tribunal concluded that none of the elements specified in Rule 25 justified the penalty imposition. Despite the statutory violation, the lack of proof of fraudulent intent led to the dismissal of the Revenue's appeal. The judgment emphasized that without evidence of fraudulent activities, the penalty under Rule 25 could not be upheld, ultimately ruling in favor of the respondent and dismissing the Revenue's appeal.