Rule 25 penalty pre-deposit waiver granted on prima facie challenge to notice and contravention requirements.

Waiver of pre-deposit and stay of recovery were granted against a penalty under Rule 25 of the Central Excise Rules, 2002, because the assessee had already paid the duty and interest before the show-cause notice. The notice had proposed penalty under Rule 25 and Rule 27 read with Section 11AC, while the final penalty was imposed under Rule 25. A prima facie question arose on the applicability of Rule 25 penalty and on invoking sub-rule (2) without a specific notice of the exact contravention. In the absence of contrary binding authority, the record showed a prima facie case in favour of the assessee.

---

---

Issues: Whether waiver of pre-deposit and stay of recovery should be granted in respect of the penalty imposed under Rule 25 of the Central Excise Rules, 2002.

Analysis: The assessee had paid the duty along with interest before issuance of the show-cause notice. The penalty was imposed under Rule 25, while the notice had proposed penalty under Rule 25 and Rule 27 read with Section 11AC of the Central Excise Act, 1944. The challenge raised a prima facie question on the applicability of penalty under Rule 25 and on invocation of sub-rule (2) without a specific notice of the exact contravention. In the absence of contrary binding authority, the record disclosed a prima facie case in favour of the assessee.

Conclusion: Waiver of pre-deposit and stay of recovery were granted in respect of the penalty.

---