2009 (7) TMI 1068 - AT - Central Excise

Penalty u/r 25 - The entire duty now stands paid by the appellant - Rule 25 is not invokable under such circumstances - penalty set aside.

Summary

Issues: Restoration of appeal due to non-compliance with stay order, imposition of penalty under Rule 25 and Rule 27 of Central Excise Rules.

The judgment pertains to an application for restoration of an appeal that was previously dismissed for non-compliance with a stay order. The advocate for the appellant informed the tribunal that the directed amount was deposited promptly but was not communicated to the Registry. The tribunal, considering the circumstances, recalled the earlier order, allowed the restoration application, and proceeded to decide the appeal due to a single issue involved.

Regarding the substantive issue, the appellants had cleared their final product without paying duty due to financial difficulties. The lower authorities confirmed the duty demand and imposed penalties under Rule 25 of the Act and Rule 27 of the Central Excise Rules. The advocate cited a precedent where it was held that in cases where duty has been paid subsequently, Rule 25 is not applicable, and penalties under Rule 27, with a maximum of Rs. 5,000, should be imposed.

The tribunal found that the main challenge in the appeal was the penalty. Since the duty had been paid by the appellant, Rule 25 was deemed inapplicable. Therefore, the penalty under Rule 25 was set aside, but the penalty of Rs. 5,000 per show cause notice (two notices in this case) under Rule 27 was upheld. The appeal was disposed of accordingly, and the application for restoration of appeal was also disposed of.

The judgment, delivered by Ms. Archana Wadhwa, provides a clear analysis of the issues involved, the legal principles applied, and the decision reached by the tribunal in this matter.