TMI Blog2018 (3) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... at in absence of the ingredients like suppression, or wilful mis-statement as provided under Section 11AC of the Central Excise Act, 1994, the provisions of Rule 25 ibid cannot be invoked. This Tribunal in the case of Industrial Thermo Pack [2015 (3) TMI 1145 - CESTAT NEW DELHI] under identical set of facts of non-maintenance of proper records, has set aside the redemption fine and penalty, holding that there was no deliberate or mala fide intention to remove the goods clandestinely. Penalty on the Director u/r 26 - Held that: - since the goods cannot be confiscated, there is no question of imposition of penalty on the Director of the assessee-appellant under Rule 26 ibid. Appeal allowed - decided in favor of appellant. - E/1948-1949/2012-SM - A/50661-50662/2018-SM[BR] - Dated:- 15-2-2018 - Mr. S.K. Mohanty, Member (Judicial) Shri Manish Saharan, Advocate - for the Appellant Shri K. Poddar, D.R. - for the Respondent ORDER Per: S.K. Mohanty These appeals are directed against the impugned order dated 30.3.2012 passed by the Commissioner (Appeals), Customs, Central Excise Service tax, Indore. 2. The brief facts of the case are that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate dated 12.4.2010 issued by M/s ABN Company, the Chartered Accountant firm, wherein they have clarified that the closing stock as on 31st July 2009 in respect of clinker (WIP) was 693.941 MTs and cement (finished goods) was 48.900 MT. Thus, he submits that non-maintenance of record during the intervening period cannot tantamount to the removal of goods clandestinely without payment of duty. He accordingly, submits that the goods cannot be confiscated and penalties cannot be imposed on the appellants. To support such stand, the ld. Advocate has relied on the judgement of Hon ble Gujarat High Court in the case of CCE Vs. Saurashtra Cement Ltd. 2010 (260) ELT 71 (Guj.) and also the decisions of this Tribunal in the case of Industrial Thermo Pack 2015-TIOL-1468-CESTAT-DEL . and Salasar Steel and Power Ltd. 2017-TIOL-268-CESTAT-DEL. 4. On the other hand, the ld. DR appearing for the Revenue reiterates the findings recorded in the impugned order and further submits that since, the appellant had contravened the provisions of Rule 25 of the Central Excise Rules, 2002 in non-maintaining the production register on regular basis, it is exposed to the penal conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of duty, the person who is liable to pay duty as determined under sub-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. 18. This issue has come up before the Andhra Pradesh High Court in case of Commissioner of C. Ex. Guntur v. Andhra Cements Limited (supra) wherein the Court has taken the view that as per Rule 25(d) of the Rules subject to the provisions of Section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer, contravenes any of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The Court, therefore, took the view that the orders of penalty were not sustainable and rightly interfered with by the learned single judge. 20. Even in the case of Supreme Industries Limited v. CESTAT, New Delhi (supra) , the Madhya Pradesh High Court took the view that enforcement of penal clause to be done subject to strict proof of intention to evade payment of duty. In the case before the Madhya Pradesh High Court, there was no material to show that there was intention to evade duty. The goods manufactured were not subject to quality control test and were kept on hold. The goods were to be cleared by quality control department and only thereafter were to be sent to packing department after quality control test was concluded. Merely because in statement, the Commercial Manager of petitioner in that case has stated that goods were manufactured, that by itself cannot be a ground for holding that goods were ready for despatch to customer. The Court, therefore, took the view that confiscation and penalty is not sustainable under Rule 173Q of erstwhile Central Excise Rules, 1944. 21. The Apex Court judgment in the case of Union of India v. Rajasthan Spinning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of licence is necessary for the availability of exemption under Section 5. Where the licensee contravenes the conditions of the licence or Act or the rules, he becomes liable to pay the tax, notwithstanding that a license is issued to him under Section 5. 24. In view of the above discussion and legal position emerging therefrom, we have no hesitation in confirming the orders passed by the Tribunal and dismissing all these Appeals filed by the Revenue, by holding that there was no intention on the part of the respondent assessee to evade any payment of duty. It is only because of stringent financial condition, that the duty could not be paid in time and as soon as liquidity was available, duty was paid along with interest. The Tribunal has, therefore, rightly come to the conclusion that penalty could not be levied under Rule 25 of the Rules and for the alleged default, the penalty was restricted to ₹ 5,000/- in each matter under Rule 27 of the Rules. We, therefore, hold that no question of law, much less any substantial question of law arises out of the orders passed by the Tribunal. 8. I also find that this Tribunal in the case of Industrial Thermo Pack ..... X X X X Extracts X X X X X X X X Extracts X X X X
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