Rule 25 penalty needs proven contravention and intent to evade duty; absent knowledge of non-export, penalty fails.

Penalty under Rule 25 of the Central Excise Rules, 2001 applies only when the specified contraventions are established and, for clause (d), there is intention to evade duty. On the stated facts, clauses (a), (b) and (c) were inapplicable, and clause (d) could not be invoked because the record did not show that the assessee knew or had reason to believe the goods would not be exported when sold to merchant exporters. The penalty was therefore held unsustainable and set aside.

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Issues: Whether penalty imposed under Rule 25 of the Central Excise Rules, 2001 was sustainable against the assessee on the facts of the case.

Analysis: Rule 25 attracts confiscation and penalty only where the specified contraventions are established. On the facts, clauses (a), (b) and (c) were not applicable, and clause (d) also could not be invoked because the record did not show any intention to evade duty. There was nothing to indicate that, when the goods were sold to the merchant exporters, the assessee knew or had reason to believe that the sugar would not be exported.

Conclusion: The penalty was not sustainable and was set aside in favour of the assessee.

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