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2023 (10) TMI 350 - CESTAT CHENNAIClassification of goods - combipack which contains the EMD and MRR - to be classified under the Heading 85167920 of CETA 1985 or not - penalty u/r 25 of CER - HELD THAT:- The issue has been considered by the Tribunal in the case of KARAMCHAND APPLIANCES PVT. LTD. VERSUS COMMR. OF C. EX., CHANDIGARH [2013 (4) TMI 79 - CESTAT, NEW DELHI]. The Tribunal in the said case observed that the essential character of the combi pack is that of MRR and not EMD - The Tribunal thus held that the product is classifiable under 3808.10. By judicial discipline, following the above decision of the Tribunal and hold that the goods viz. the combipack consisting of EMD & MRR are classifiable under 38089191 as determined by the department. The issue on merits is answered in favour of the Revenue and against the assessee. Levy of penalty u/r 25 of Central Excise Rules, 2002 - HELD THAT:- The first Show cause notice has been issued invoking the extended period of limitation alleging suppression of facts with an intent to evade payment of duty. The adjudicating authority has rendered a finding that the issue was contentious and there were divergent views prevailing during the relevant time - the demand was thus restricted to normal period. In the absence of any malafide intention, penalty cannot be imposed under Rule 25 of Central Excise Rules, 2002 also. The said rule states that only when there is non-payment of duty with an intent to evade payment of duty, the penalty can be imposed. The findings recorded by the original authority itself shows that there was no intention to evade payment of duty and therefore the penalty imposed under Rule 25 of Central ExciseRules 2002 is not justified and requires to be set aside - the impugned order is modified to the extent of setting aside the penalty of Rs.5,00,000/- lakhs imposed under Rule 25 of Central Excise Rules, 2002. The demand confirmed along with interest is sustained. Appeal allowed in part.
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