Post-clearance duty payment and excise penalty: Rule 25 not attracted, but Rule 27 penalty sustained for each notice.

Payment of the entire excise duty after clearance of goods before disposal of the appeal meant Rule 25 of the Central Excise Rules, 2002 was not attracted, so the penalty under that rule was set aside. The Tribunal nonetheless held that the underlying contravention continued to justify penalty under Rule 27, which permits a maximum penalty of Rs. 5,000 per offence, and sustained the penalty at that limit. As the matter arose from two show-cause notices, the Rule 27 penalty was maintained separately for each notice.

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Issues: Whether, on payment of the entire duty after clearance of the goods, penalty under Rule 25 of the Central Excise Rules, 2002 was invocable and whether penalty under Rule 27 of the Central Excise Rules, 2002 was sustainable.

Analysis: The duty liability, though initially unpaid, stood discharged by the appellant before disposal of the appeal. In such circumstances, the Tribunal held that Rule 25 was not attracted. The contravention, however, still justified a penalty under Rule 27, which prescribes a maximum penalty of Rs. 5,000 per offence. The appeal involved two show-cause notices, and the penalty under Rule 27 was maintained at that limit for each notice.

Conclusion: Penalty under Rule 25 was set aside, while penalty under Rule 27 was upheld.

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