Central Excise penalty for Rule 8 default lies under Rule 27, not Rule 25, for non-compliance with duty payment requirements.

For default in complying with the duty payment requirement under Rule 8 of the Central Excise Rules, 2002, the appropriate penal provision is the residuary general penalty under Rule 27, not Rule 25. The Tribunal accepted the later High Court view that Rule 25 was not the correct basis for penalty in such a contravention, making penalty under that rule unsustainable. The operative effect is that only the general penalty under Rule 27 could be imposed for the Rule 8 breach.

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Issues: Whether, on default under Rule 8 of the Central Excise Rules, 2002, penalty was leviable under Rule 25 or only the general penalty under Rule 27 of the Central Excise Rules, 2002.

Analysis: The default related to non-compliance with the duty payment requirement under Rule 8. The Tribunal accepted the later High Court view that, for such contravention, Rule 25 was not the appropriate penal provision and that the residuary/general penalty provision under Rule 27 governed the case.

Conclusion: Penalty under Rule 25 was unsustainable and only penalty under Rule 27 of the Central Excise Rules, 2002 could be imposed. The assessee succeeded on this issue.

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