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2014 (8) TMI 136 - AT - Central ExciseWaiver of pre-deposit of penalty - contravention of the provisions of Central Excise Act and the Rules - Held that - On perusal of the records, it is observed that there is no dispute as to the discharge of differential duty liability and interest thereof by the appellant, before the issuance of show cause notice. The appellant is disputing only the penalty imposed by the Adjudicating Authority - The adjudicating authority has imposed a penalty under Rule 25 of the Central Excise Rule 2002 without recording any findings or reasonings for such imposition of penalty under the said rule. Penalty imposed on the appellant under Rule 25 is uncalled for and is incorrect appreciation of the law - for the imposition of penalty under Rule 25 in a given circumstance, requirement of Section 11AC as to mis-statement etc., needs to be satisfied. As the Adjudicating Authority has himself recorded that there is no intention of evade duty, visiting the appellant with penalty is totally uncalled for - Following decision of Saurashtra Cements Ltd (2010 (9) TMI 422 - GUJARAT HIGH COURT , Harsh Silk Industries (2013 (6) TMI 83 - GUJARAT HIGH COURT) and Mahalaxmi Profiles 2012 (9) TMI 706 - ANDHRA PRADESH HIGH COURT - Decided in favour of assessee.
Issues:
Waiver of pre-deposit of penalty under Rule 25 of the Central Excise Rule 2002 and imposition of penalty under Section 11AC. Analysis: The appellant filed a stay petition seeking waiver of pre-deposit of penalty of Rs. 2,50,000 imposed for contravening the Central Excise Act and Rules. The Tribunal found the issue to be narrow and decided to dispose of the appeal on merits after allowing the application for waiver. The facts revealed that the appellant had short paid duty on material cleared after job work, voluntarily reversed the amount, but did not pay interest. A Show Cause Notice was issued, leading to the imposition of penalty under Rule 25 and appropriation of the amount paid by the appellant. The appellant contended that the duty liability and interest were paid before the notice, citing inadvertent mistake and lack of intent to evade duty. The Tribunal noted that the appellant disputed only the penalty, as the duty liability was discharged before the notice. The adjudicating authority imposed a penalty under Rule 25 without providing reasons for it. However, the authority acknowledged the absence of wilful misstatement or intent to evade duty, leading to payment by the appellant upon audit. The Tribunal found the penalty to be unwarranted based on the authority's own findings and cited judgments from High Courts emphasizing the need to satisfy Section 11AC requirements for penalty imposition under Rule 25. As there was no intent to evade duty, the Tribunal deemed the penalty incorrect and set aside the order, allowing the appeal. The decision aligned with the settled law by High Courts on the imposition of penalty under Rule 25 in such circumstances. In conclusion, the Tribunal set aside the penalty imposed on the appellant under Rule 25, as there was no intention to evade duty, and the appellant had paid the duty liability and interest before the Show Cause Notice. The judgment highlighted the importance of satisfying Section 11AC requirements for penalty imposition and emphasized the settled law by High Courts in similar cases. The appeal was allowed, and the impugned order on penalty imposition was overturned.
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