2008 (1) TMI 149 - AT - Central Excise

Penalty - non-furnishing of proof of export within the stipulated time violation of condition of not. 42/01 which prescribes six months time limit for exporting goods from the date of clearance from factory - appellants had intimated about the export of goods and it also prayed for condonation of delay in exporting the goods before Divisional Officer - proof has been accepted by DO - no deliberate intention to violate the Notification to cause Revenue loss penalty set aside

Summary

Issues: Challenge to penalty imposed under Rule 25 of Central Excise Rules for non-furnishing of proof of export within stipulated time under Notification No. 42/2001-CE(NT). Justification of penalty imposition despite obtaining permission for belated export.

Analysis:
1. The appellant contested the penalty of Rs. 10,000 under Rule 25 of Central Excise Rules, challenging the Commissioner's decision in the impugned order. The Commissioner acknowledged no duty violation but noted non-compliance with Rule 19 of CE Rules regarding proof of export timing under Notification No. 42/2001-CE(NT). However, all consignments in question were either exported or diverted for home consumption with proper permissions and notifications. The demand for duty was dropped, and no notice under section 11A was warranted. Penalty was imposed for failure to fulfill statutory obligations on 3 ARE-1s, leading to the penalty under Rule 25.

2. The appellant's counsel argued that permission was obtained for belated export of the 3 ARE-1s, with no intent to evade duty. The penalty was deemed unjustified, especially after the Department condoned the delay and the exports were completed. Citing legal precedents like Hindustan Steel Limited Vs. State of Orissa and other Supreme Court judgments, the counsel contended that penalty is not mandatory for every violation. The counsel also referred to Tribunal rulings to support the argument against penalty imposition.

3. The learned JDR maintained that the violation of the Notification by not exporting goods within six months warranted the penalty, emphasizing the importance of compliance with the export timeline.

4. The impugned order revealed the appellants' compliance efforts, including intimating about exports and seeking condonation for export delays, which were accepted by the Divisional Officer. Given the lack of deliberate intent to violate the Notification and cause revenue loss, the imposition of penalty was deemed unwarranted. Citing Supreme Court judgments, the penalty was set aside, and the appeal was allowed with any consequential relief.

In conclusion, the judgment revolved around the challenge to a penalty imposed for non-compliance with export proof timing requirements under a specific Notification, highlighting the importance of statutory obligations and compliance efforts in penalty imposition decisions. The legal arguments presented by both sides, supported by relevant case laws and Tribunal rulings, were crucial in determining the outcome in favor of the appellant.