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TMI Blog2018 (12) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... SCN the confiscation of the stock which was found available at the time of physical verification worth Rs. 5,43,73,953/- was proposed alongwith the penalty to be imposed under Rule 25 of Central Excise Rules. While adjudicating the said SCN, the Joint Commissioner vide Order No. 5 dated 23.08.2017 has rejected the proposal of confiscation of the stock as was found available. However, the penalty under Rule 25 was confirmed. Being aggrieved of the said imposition Appeal before Commissioner(Appeals) was preferred who vide the Order under challenge i.e. the one bearing No 679 dated 26.02.2018 has confirmed the imposition of the penalty. Being aggrieved, the appellant is before this Tribunal. 2. I have heard Mr. Mehul Jivani, Ld. CA for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon by Commissioner(Appeals) is impressed upon in that respect and Appeal is prayed to be dismissed. 5. After hearing both the parties I am of the opinion that the adjudication in the case has shrunken to a narrow compass of the issue of imposition of penalty upon the appellant in view of the findings otherwise arrived at by the Adjudicating Authority below. It is observed from the orders of the adjudicating authorities that the confiscation of finished stock as was proposed by the impugned SCN is held to be proposed merely on ground of not tallying it with ER-2 return filed, and thus not sustainable when the said stock is physically available in the factory premises and also found tallying with the records maintained in SAP system ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the charges of suppressing with intent to clear the same clandestinely are not sustainable. There is otherwise no evidence on record to prove any intention of clandestine clearance. Above all there is no evidence on record to prove any intention of clandestine clearance. Commissioner(Appeals) has held that the charges of suppressing production with intent to clear the same clandestinely are not sustainable qua the appellant. Also from the statements and the other evidences on record I do not find any infirmity with these findings. 7. It is only to be adjudicated now as to whether the malafide intention is not a prerequisite for imposition of penalty under Rule 25 as has been held by the authorities below. For the purpose the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Rues made there under with intent to evade payment 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 wilful 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-levy of duty in certain cases. It says that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment 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, collus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re beyond the control of the respondent-company as the matter was pending before BIFR, and as such, the amounts could not be deposited by the respondent-company within time and as soon as it was in a position to make the payment, the respondent-company made the payment not only of the duty, but also the interest calculated under Rule 8(3) of the Rules. The Court, therefore, come to the conclusion that the Tribunal has correctly interpreted Rule 25 of the Rules and the penalty cannot be imposed on the assessee company. 19. A similar issue has come up before the Kerala High Court in the case of Superintendent of Central Excise v. Sance Pharmaceuticals (supra). The Court in that case was concerned with issuance of show-cause notice and levy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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