Penalty for delayed re-warehousing certificate rejected where breach was only technical and no wilful defiance was found.

Penalty under Rule 27 of the Central Excise Rules was held not to be automatic for delayed submission of a re-warehousing certificate or breach of Rule 20. In the absence of any finding that the delay was due to contravention of law, mala fide conduct, or wilful defiance, the breach was treated as technical only. The language of Rule 27 was read as not requiring punishment for every breach, and the assessee was exonerated on the facts.

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Issues: Whether penalty under Rule 27 of the Central Excise Rules, 2002 was mandatory for delayed submission of the re-warehousing certificate and breach of Rule 20 of the Central Excise Rules, 2002.

Analysis: The delay in receiving the re-warehousing certificate beyond 90 days was found, but the appellate order did not deal with the cause of delay. In the absence of any finding that the delay was attributable to a contravention of law, mala fide conduct, or wilful defiance, the breach was only technical. The language of Rule 27 did not indicate that every breach must necessarily be visited with penalty.

Conclusion: Penalty under Rule 27 was not justified on the facts, and the assessee was entitled to exoneration.

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