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TMI Blog2018 (11) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Rules also will not be attracted. As the assessee possesses a registration certificate, Clause (c) of Rule 25(1) cannot be invoked. Thus, the Revenue, to sustain the penalty, should bring the case of the assessee under Clause (d) of Rule 25(1) of the Rules, where they could show that the assessee contravened the provisions of the Rules with intent to evade payment of duty - Admittedly, the Tribunal while passing the impugned order did not give any reason as to why the penalty of 5,00,000/- should be confirmed. Penalty set aside - appeal allowed - decided in favor of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... goods in contravention of any of the provisions of these rules or the notifications issued under these rules;or (b)does not account for any excisable goods produced or manufactured or stored by him; or (c)engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under Section 6 of the Act; (d)contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, the Revenue, to sustain the penalty, should bring the case of the assessee under Clause (d) of Rule 25(1) of the Rules, where they could show that the assessee contravened the provisions of the Rules with intent to evade payment of duty. Admittedly, the Tribunal while passing the impugned order did not give any reason as to why the penalty of ₹ 5,00,000/- should be confirmed. 8.We may note that the Tribunal has granted full relief to the assessee, insofar as the penalty, which was imposed under Section 11AC of the Act, on the ground that there is no menserea. The finding in this regard, as recorded by the Tribunal, is as follows: "5.2. . . . . . . we also find that the department came to know the non-payment of duty only fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal and the question which was framed for consideration was whether declaration of the assessee company therein as sick industry by the BIFR could be construed as 'reasonable cause' for the purposes of invoking Section 80 of the Finance Act, 1994 and whether the Tribunal was right in setting aside the penalty in full, solely on the ground that the assessee therein was declared as a sick industry. The Division Bench found that the Tribunal was justified in setting aside the penalty, as the assessee was going through financial constraint and accordingly, dismissed the appeal filed by the Revenue. 10.The appellant/assessee before us is more or less in the identical position as that of Ramanasekar steels ltd., and we are of the consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to evade payment of duty. The Tribunal in the assessee's case, while partly allowing the appeal, filed before it, observed that there was no mensrea on the part of the assessee or intention to evade payment of duty and accordingly vacated the penalty imposed under Section 11AC of the Act. The said reasoning will equally enure in favour of the assessee in respect of penalty under Rule 25 of the Rules. For the above reasons we hold that there is no ground to impose penalty on the assessee under Rule 25 of the Rules. 15.Accordingly, the Civil Micelllaneous Appeal filed by the assessee is allowed and that portion of the order of the Tribunal, imposing penalty under Rule 25 of the Rules, is set aside and the Substantial Questions of Law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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