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TMI Blog2017 (12) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue. Applicability of Rule 25 ibid in the identical situation, came up for consideration before the Hon’ble Gujarat High Court in the case of Saurashtra Cement Ltd. [2010 (9) TMI 422 - GUJARAT HIGH COURT], wherein upon analysis of the statutory provisions, the Hon’ble Court held in the absence of intention to evade payment of duty, the provision of Rule 25 read with Section 11 AC ibid cannot be invoked for imposition of fine and penalty. Confiscation, redemption fine and penalties set aside - appeal allowed - decided in favor of appellant. - Excise Appeal No. E/2570/2011- [SM], Excise Appeal No. E/51518/2017- [SM] - Final Order No. 58132-58133/2017 - Dated:- 27-11-2017 - Hon'ble Mr. S. K. Mohanty, Member (Judicial) Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s confirmed against the appellant. Besides, 11039 bags of free sugar valued at ₹ 2,19,39,610/- and 31 bags of Levy Sugar valued at ₹ 44,143/- were confiscated, with the option to the appellant to redeem the same on payment of redemption fine of ₹ 25 lacs. Further, the adjudication order also imposed penalty of ₹ 5 lacs. on the appellant No. 1 and ₹ 1 lac on the appellant No. 2 under Rule 25 and 26 ibid respectively. On appeal against the adjudication order, the ld. Commissioner (Appeals), Customs Central Excise and Service Tax, Indore vide the impugned order dated 22.07.2011 has modified the adjudication order to the extent of reducing the quantum of redemption fine and penalty in the case of appellant-1 from & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty cannot be imposed against him under Rule 26 ibid. To support such stand, the ld. Advocate has relied on the judgment of Hon ble Gujarat High Court in the case of Commissioner of Central Excise Customs VS. Saurashtra Cement Ltd. 2010 (260) E.L.T. 71 (Guj.) and affirmed by Hon ble Supreme Court reported in 2013 (292) E.L.T. A98 (SC.). 4. On the contrary, the ld. DR appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that since the tax liability was not discharged within the stipulated time, the provisions of the Central Excise statue have been violated by the appellants and thus, confiscation of goods and imposition of redemption fine and penalties by the authorities below are in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raphs in the said judgment are extracted herein below: 16. The Tribunal considering Rule 25 has observed in its order that Rule 25 provides for imposition of penalties which shall not exceed the duty on the excisable goods, when there is contravention of the nature referred to in clause (a), clause (b), clause (C) or clause (d). The Tribunal found that clause (a) of Rule 25 refers to removal of excisable goods in contravention of any of the provisions of the Rules. When goods were removed, no excise duty was required to be paid at that point of time. As such, it cannot be said that the contravention of the nature mentioned in the said clause has been committed by the assessee. Clause (b) is to the effect that the manufacturer does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (2) of Section 11AC, shall also be liable to pay a penalty equal to the duty so determined. For the purpose of invoking Section 11AC of the Act, the condition precedent is that the duty has not been levied, or paid or short-levied or short-paid or the refund is erroneously granted by reasons of fraud, collusion or any willful misstatement or suppression of facts. If these ingredients are not present, penalty under Section 11AC cannot be levied. Since Rule 25 can be invoked subject to the provisions of Section 11AC of the Act, as a natural corollary, the ingredients mentioned in Section 11AC are also required to be considered while determining the question of levying of penalty under Rule 25 of the Central Excise Rules. 24. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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