1998 (12) TMI 259 - Commissioner - Central Excise

Summary

Issues:
Violation of Rule 224 of Central Excise Rules, 1944 leading to penalty imposition.

Analysis:
The case involves an appeal against the Order-in-Original passed by the Additional Commissioner of Central Excise, imposing a penalty of Rs.1,00,000 for the removal of excisable goods without obtaining permission under Rule 224. The appellant argued that the violation was not intentional, citing practical difficulties due to the holiday on the day of the incident. The appellant contended that all necessary documents were in order, and there was no loss of revenue. The Commissioner noted that the violation was technical and did not warrant such a severe penalty. The Commissioner criticized the lower authority for not considering the absence of mens rea and for imposing an excessive penalty under Rule 173Q instead of the maximum penalty of Rs. 2,000 under Rule 223B for Rule 224 violation.

The Commissioner found the penalty imposed to be disproportionate to the offense and lacking proper application of mind. Consequently, the Commissioner set aside the impugned order and reduced the penalty from Rs. 1,00,000 to Rs. 2,000, the maximum amount justifiable under Rule 223B for the Rule 224 violation. Additionally, the Commissioner revoked the redemption fine of Rs. 50,000 imposed for releasing the truck carrying the goods, as the offense was deemed a non-compliance issue with Rule 224. The judgment emphasized that the penalty should be commensurate with the offense and should consider the absence of any deliberate attempt to evade excise duty. The decision highlighted the importance of applying a balanced and reasoned approach while imposing penalties for technical violations.