Procedural delay in duty payment attracts token penalty where no deliberate evasion is shown and records were lost in flooding.

Delayed payment of central excise duty, where goods were duly accounted for and cleared under invoices and the delay was attributed to loss of records in a flood, was treated as a procedural contravention rather than deliberate evasion. In the absence of circumstances indicating suppression or intent to evade duty, the harsher penalty provision under Rule 25 was held inapplicable, and the default was aligned with Rule 27, which contemplates only a token penalty. The article notes that the penalty was therefore reduced to the lesser penalty prescribed for procedural breach.

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Issues: Whether penalty for delayed payment of duty was rightly imposed under Rule 25 of the Central Excise Rules, 2002, or whether the contravention was liable to be dealt with only under Rule 27 of the Central Excise Rules, 2002.

Analysis: The goods had been accounted for and cleared under Central Excise invoices, and the delay in payment of duty was explained by loss of records in a flood. In the absence of circumstances showing deliberate evasion, the appropriate provision for such delay was the one dealing with procedural contravention rather than the provision invoked for harsher penalty. The Tribunal followed its earlier view that delay in discharge of duty liability attracts Rule 27, which provides only a token penalty.

Conclusion: The penalty under Rule 25 was not sustainable in the facts of the case and was reduced to the penalty prescribed under Rule 27.

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