THIRD MEMBER ON REFERENCE : SHRI S.K. GAULE, MEMBER (T) COMMISSIONER OF CENTRAL EXCISE, KOL. IV Vs. KUSUM PRODUCTS LTD.

JUDGEMENT

(1.) HEARD both sides. The Revenue has filed an appeal against the order of dropping the penalty.

(2.) THE facts are that a show -cause notice was issued to the respondent on the ground that they have contravened the provisions of Rules 4 and 8 of the Central Excise Rules, 2002 as they discharged their Central Excise duty liability of clearance of vegetable products from their factory during the period from June, 2003 to May, 2004 by utilizing the accumulated credit in their RG 23B Part II with the reference to Notification No. 45/89 -C.E. (N.T.) dated 11 -10 -1989 as amended from time to time, though such payment by utilization from that account does not appear to be valid or permissible during the said period as the said Notification was rescinded by Notification No. 16/96 -C.E. (N.T.) dated 23 -7 -1996 which had the consequence of abolishing the scheme under the said Notification for utilization of such accumulated money credit for the said purpose w.e.f. 23 -7 -1996. Thus, it appears that the entire clearances of vegetable products from June, 2003 to May, 2004 were made without payment of Central Excise duty payable. Therefore, the respondent has evaded the payment of Central Excise duty during the said period. With a proposal to pay duty along with interest, a penalty was also proposed under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. During the course of adjudication, the demands were confirmed and the same has been admitted by the respondent but for imposing the penalty, the Commissioner made the following observations : (v) Regarding the question of imposition of penalty, there is no suppression of facts before the Department or wilful mis -statement or fraud or evasion of duty. In the overall facts and circumstances of the case including the complexity of the issues involved, I come to the conclusion that this is not a case where the penal provisions can be upheld or that where the penalty can be imposed. Therefore, I refrain from imposing penalty in the instant case.

(3.) AGAINST that order, the Revenue is in appeal on the following grounds : The adjudicating authority has discussed the reasons of not imposing penalty as there was no suppression of fact, fraud etc. But there is no discussion about not imposing penalty under Rule 25 of the Central Excise Rules, 2002 for which none of the above ingredients are required and on the contrary, ingredients, viz violation of any rule with intent to evade duty (here violation of Rules 4 & 8 of Central Excise Rules, 2002) are very much present for imposing penalty under Rule 25 of the said Rules.