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2016 (9) TMI 128 - AT - Central ExciseImposition of penalty - Rule 25 & 26 of Central Excise Rules 2001 - appellants manufacturing excisable goods not registered with the department - clearance of excisable goods without payment of duty which were ultimately exported - Held that - as the issue is no longer res integra and decided by the Hon ble High Court of Gujarat in the case of C.C.E & Cus. Vs. Saurashtra Cement Ltd. 2010 (9) TMI 422 - GUJARAT HIGH COURT which was affirmed by the Hon ble Apex Court in 2014 (1) TMI 264 - SUPREME COURT OF INDIA and as observed by the authorities below that there was no intention to evade payment of duty on the part of the respondent, the provisions of Rule 25 of Central Excise Rules, 2001 are not invokable and as such the penalties are not imposable. - Decided against the Revenue
Issues:
Appeal against dropping of penalties by Commissioner (Appeals) - Imposition of penalty under Rule 25 of Central Excise Rules 2001 and Rule 26 of Central Excise Rules 2001 - Intent to evade payment of duty - Interpretation of Section 11AC of the Central Excise Act - Applicability of Rule 25 of Central Excise Rules 2001 - Precedent from the Hon’ble High Court of Gujarat - Affirmation by the Hon’ble Apex Court - Upholding of impugned order - Dismissal of Revenue's appeal. The judgment pertains to an appeal by the Revenue against the dropping of penalties by the Commissioner (Appeals) in a case involving the manufacture and clearance of excisable goods without payment of duty. The adjudicating authority initially refrained from imposing a penalty under Section 11AC of the Act due to the absence of intent to evade payment of duty but later imposed a penalty under Rule 25 of the Central Excise Rules 2001 on the Managing Director of the party. The Commissioner (Appeals) subsequently dropped the penalties on both respondents, leading to the Revenue's appeal. Upon review, the Commissioner (Appeals) and the adjudicating authority both found no intention to evade payment of duty on the part of the respondent, rendering the provisions of Rule 25 of the Central Excise Rules, 2001 inapplicable. The Tribunal examined the decision of the Hon’ble High Court of Gujarat in a similar case, emphasizing that for the invocation of Section 11AC of the Act, specific conditions such as fraud, collusion, willful misstatement, or suppression of facts must be present. As the issue had been settled by the Hon’ble Apex Court and considering the absence of intent to evade payment of duty, the Tribunal upheld the impugned order, dismissing the Revenue's appeal. The judgment underscores the importance of establishing the requisite conditions under Section 11AC of the Central Excise Act for the imposition of penalties, highlighting that penalties under Rule 25 of the Central Excise Rules 2001 are contingent upon the provisions of Section 11AC. The decision draws on legal precedents to support the conclusion that penalties are not imposable in the absence of intent to evade duty, ultimately leading to the dismissal of the Revenue's appeal. The case serves as a reminder of the legal principles governing penalty imposition in excise duty matters and the significance of demonstrating deliberate intent to evade payment for penalty enforcement.
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