Rule 8(3A) duty default does not automatically attract section 11AC penalty without independent proof of suppression or evasion.

Delayed payment of central excise duty under rule 8(3A) of the Central Excise Rules, 2002 was held to be governed by that rule's own consequences, including payment without utilising CENVAT credit, rather than by automatic invocation of section 11AC of the Central Excise Act, 1944. The Tribunal found that the ingredients of section 11AC, particularly suppression of facts with intent to evade duty, were not independently established on the record. As penalty under rule 25(1)(a) had already been imposed, it was treated as sufficient, and penalty under section 11AC was held not leviable.

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Issues: Whether penalty under section 11AC of the Central Excise Act, 1944 is leviable for default in payment of duty under rule 8(3A) of the Central Excise Rules, 2002.

Analysis: The default concerned delayed payment of duty under rule 8. The rule itself provides that, on failure to pay duty beyond the prescribed period, the assessee must pay duty for each consignment without utilizing CENVAT credit and that the consequences and penalties under the rules would follow. The Tribunal held that the situation was governed by rule 8(3A), which does not attract the ingredients of section 11AC of the Central Excise Act, 1944. On the facts recorded, the Tribunal accepted that the case was not one of suppression of facts with intent to evade duty and that the penalty already imposed under rule 25(1)(a) was sufficient.

Conclusion: Penalty under section 11AC was not leviable for the rule 8(3A) default, and the Revenue's appeal failed.

Ratio Decidendi: Where a duty default is specifically governed by rule 8(3A) of the Central Excise Rules, 2002, penalty under section 11AC of the Central Excise Act, 1944 is not attracted unless the statutory ingredients for that section are independently established.

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