Rule 25 penalty can apply despite non-availability of goods, and must meet the statutory minimum.

Penalty under Rule 25 of the Central Excise Rules, 2002 remained invocable even though the goods were not physically available for confiscation, because their confiscable character was not lost on that account. With the duty demand already confirmed under Section 11A of the Central Excise Act, 1944, the dispute was confined to penalty. The Tribunal also held that the reduced penalty failed to reflect the statutory minimum prescribed under Rule 25, so the penalty had to be enhanced to the minimum amount required by the rule.

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Issues: Whether penalty under Rule 25 of the Central Excise Rules, 2002 was invocable even though the goods were not physically available for confiscation, and whether the penalty was liable to be enhanced to the statutory minimum.

Analysis: The duty demand had already been confirmed under Section 11A of the Central Excise Act, 1944, and the dispute in appeal was confined to the penalty. The Tribunal held that the confiscable character of the goods was not lost merely because the goods were not physically available, and therefore invocation of Rule 25 was proper. It further held that the Commissioner (Appeals) had not taken into account the minimum penalty prescribed under the rule while reducing the penalty to Rs. 1,000/-.

Conclusion: Rule 25 was rightly invoked, and the penalty was required to be enhanced to Rs. 10,000/-.

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