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2023 (5) TMI 329 - AT - Central ExciseLevy of penalty imposed in terms of Rule 25(1)(d) of Central Excise Rules 2002 - maintainability of appeal - HELD THAT - After enhancement the total amount of penalty imposed on the respondent would be around Rs.52, 98, 386/-. Accordingly this preliminary objection not to be overruled. The respondent had deposited the entire duty along with interest on 15.02.2011 prior to issuance of show cause notice i.e. 05.08.2011. In such a situation respondent could not have been subjected to any penalty under Section 11AC as has been held by the Tribunal in the case of CCE C. AURANGABAD VERSUS MATSYODARI STEEL ALLOYS PVT. LTD. 2007 (7) TMI 183 - HIGH COURT BOMBAY . There are no merit in the appeal filed by the Revenue for imposition of penalty under Section 11AC of the Central Excise Act 1944 - appeal of Revenue dismissed.
Issues involved:
The issues involved in this case are the confirmation of central excise duty demand, recovery of interest, imposition of penalty under rule 25(1)(d) of Central Excise Rules, 2002, and the challenge against the penalty imposed in terms of Rule 25(1)(d) of Central Excise Rules, 2002. Confirmation of Central Excise Duty Demand: The appeal filed by Revenue against the Order-in-Original dated 17.09.2012 confirmed the demand of central excise duty amounting to Rs.52,98,386.00 from the company under section 11A(11) of the Central Excise Act, 1944. The Commissioner ordered the recovery of interest at appropriate rates and imposed a penalty under rule 25(1)(d) of the Central Excise Rules, 2002. The Commissioner did not impose a redemption fine but imposed a penalty on the Vice-President-Operations of the company. The Revenue challenged this order only regarding the penalty imposed under Rule 25(1)(d) of Central Excise Rules, 2002, arguing that penalty equivalent to the duty should have been imposed under Section 11AC of the Central Excise Act, 1944. Recovery of Interest and Imposition of Penalty: The Commissioner confirmed the demand of central excise duty and ordered the recovery of interest on the duty not paid by the due dates. Additionally, a penalty of Rs. 15,00,000.00 was imposed under rule 25(1)(d) of the Central Excise Rules, 2002 for contraventions related to the misuse of duty-free raw materials. The Commissioner refrained from imposing a stringent penalty under Section 11AC due to the provisions of rule 6 of Central Excise Rules, 2001, which do not provide for penal action but require recovery of duty along with interest. The Commissioner justified the penalty imposed under rule 25(1)(d) based on the obvious intent to evade duty by the company. Challenge Against Penalty Imposed: The Revenue challenged the penalty imposed under Rule 25(1)(d) of Central Excise Rules, 2002, arguing that penalty equivalent to the duty should have been imposed under Section 11AC of the Central Excise Act, 1944. The Commissioner's observations were in line with previous tribunal decisions, emphasizing that the penalty under Section 11AC was not applicable in this case. The respondent had already deposited the entire duty along with interest before the show cause notice was issued, and therefore could not be subjected to any penalty under Section 11AC. Conclusion: The Tribunal upheld the impugned order without any modification, dismissing the appeal filed by the Revenue for the imposition of penalty under Section 11AC of the Central Excise Act, 1944. The decision was based on the lack of merit in challenging the penalty imposed under Rule 25(1)(d) of Central Excise Rules, 2002, considering the company's compliance with depositing the duty and interest before the show cause notice. No other appeal was filed against the Commissioner's order, leading to the dismissal of the Revenue's appeal.
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