2010 (10) TMI 437 - AT - Central Excise

Penalty - Defaulted in payment of duty - the respondents have voluntarily paid the duty along with interest much prior to the issuance of the show-cause notice -Considering the same the Commissioner had refrained from imposing the penalty - - Do not find any illegality committed in this regard by the Commissioner - There is no justification for interference with the impugned order on the ground sought to be canvassed to assail the said order - The appeal is dismissed - Decided in favour of assessee.

Summary

Issues:
Appeal against refraining from imposing penalty under Rule 25 of Central Excise Rules, 2002.

Analysis:
The appeal in question arises from an Order-in-Original passed by the Commissioner of Customs & Central Excise, Hyderabad, refraining from imposing a penalty under Rule 25 of the Central Excise Rules, 2002. The appellant challenges this decision on the grounds that the respondents had defaulted in duty payment from April 2004 to January 2005 but subsequently paid the duty along with interest under Rule 8(3) of the said Rules. The appellant argues that despite the duty payment, the penalty under Rule 25 should have been imposed. However, Rule 25 states that penalty provisions are subject to Section 11AC of the Act, which outlines the requirements for imposing penalties. It is emphasized that the respondents paid the duty and interest voluntarily before the show-cause notice was issued. The Commissioner, considering this voluntary payment, decided not to impose the penalty, a decision that is found to be legally sound. The judgment highlights that in such circumstances, where the duty was paid before any notice, there is no justification for interference with the Commissioner's decision. Therefore, the appeal is dismissed based on these grounds.

This detailed analysis of the judgment showcases the legal intricacies involved in the case, focusing on the interpretation of Rule 25 of the Central Excise Rules, 2002, and its relationship with Section 11AC of the Act. The judgment emphasizes the importance of voluntary duty payment and the timing of such payments in relation to penalty imposition. It clarifies that the basic requirements for penalty imposition under Section 11AC should not be disregarded when considering penalties under Rule 25. The decision of the Commissioner to refrain from imposing a penalty in this case is deemed appropriate and legally valid, given the voluntary payment made by the respondents before any formal notice was issued. The judgment provides a comprehensive analysis of the legal provisions and their application to the specific facts of the case, ultimately leading to the dismissal of the appeal against refraining from imposing a penalty under Rule 25 of the Central Excise Rules, 2002.