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2014 (6) TMI 549 - AT - Central ExciseWaiver of pre-deposit of penalty - Penalty under Rule 25 of the Central Excise Rules, 2002 - penalty on purchaser of goods - Held that - adjudicating authority has not imposed any penalty under Rule 26 but has imposed penalty under Rule 25 of the Central Excise Rules, 2002. On bare reading of the provisions of Rule 25 of the Central Excise Rules, 2002 we find that penalty can be imposed under the specific rule on producer, manufacturer and registered persons and not on the purchaser who has placed an order for supply of goods. In view of the foregoing, we find that the appellant has made out a prima facie strong case for waiver of the pre-deposit of the amounts involved - Stay granted.
Issues:
Waiver of pre-deposit of penalty under Rule 25 of the Central Excise Rules, 2002. Analysis: The Appellate Tribunal CESTAT Ahmedabad considered a stay petition seeking the waiver of a penalty of Rs. 50 lacs imposed on the appellant under Rule 25 of the Central Excise Rules, 2002. Upon hearing both parties and examining the records, it was noted that the appellant had placed an order for a yacht with a shipyard, leading to a dispute over the classification of the yacht. A show cause notice was issued to the shipyard for proper classification and duty recovery, directing the appellant to show cause regarding potential penalties under Rule 26. The appellant's counsel argued that penalties under Rule 26 could only be imposed on individuals, not companies. The adjudicating authority accepted this argument, refraining from imposing penalties under Rule 26 but imposing them under Rule 25 instead. However, the Tribunal observed that Rule 25 allows penalties on producers, manufacturers, and registered persons, not purchasers ordering goods. Consequently, the Tribunal found the appellant had a strong case for the waiver of the pre-deposit of the penalty amount. Therefore, the application for waiver was allowed, and recovery of the penalty amount was stayed pending the appeal's disposal. The judgment was dictated and pronounced in court by the Tribunal members.
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