Rule 25 penalty under Central Excise law held inapplicable where factory shift was pre-informed and no evasion was shown.

Penalty under Rule 25(1) of the Central Excise Rules, 2002 was held unsustainable where the factory was shifted within the same Central Excise Range, the jurisdictional officer had been informed in writing in advance, and the registration number remained unchanged. Only the address entry required correction, and the procedural requirements under Rule 9 were not breached. The absence of any irregular or fraudulent availment of Cenvat credit further negatived any allegation of evasion. Rule 25(1) was found inapplicable because the assessee did not satisfy clauses (a), (b) or (c), and clause (d) also did not apply in the absence of intent to evade duty. The penalty was set aside.

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Issues: Whether penalty under Rule 25(1) of the Central Excise Rules, 2002 was sustainable where the factory was shifted within the same range, prior intimation of the change was given to the jurisdictional officer, and the registration certificate was not formally amended before the shift.

Analysis: The shifting of the factory was within the same Central Excise Range and the jurisdictional Assistant Commissioner had already been informed in writing before the move. Since the registration number did not change, only the address entry required correction. The notification issued under Rule 9 prescribed the procedure for registration, but none of its conditions were found to have been breached. The finding that there was no irregular or fraudulent availment of Cenvat credit also negatived any basis for alleging evasion. Rule 25(1) was held inapplicable because the assessee did not fall within clauses (a), (b) or (c), and clause (d) was also not attracted in the absence of intention to evade duty.

Conclusion: The penalty under Rule 25(1) of the Central Excise Rules, 2002 was not sustainable and was set aside.

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