Appellant's Duty Payment Appeal Allowed: Penalty Set Aside

The Tribunal found no malafide intent on the part of the appellant in clearing dutiable items without payment of duty under an invalid EPCG license. The penalty of Rs. 10,00,000 imposed under Rule 25 of Central Excise Rules, 2002 was set aside, and the appeal was allowed on 02/6/2016.

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Issues:
Imposition of penalty under Rule 21 of the Central Excise Rules, 2002.

Analysis:
The appellant, engaged in manufacturing SS Pipes and Tubes, cleared dutiable items without payment of duty against an invalid EPCG license and to 100% EOUs under a CT-3 certificate. The Commissioner confirmed the demand for duty and interest, and imposed a penalty of Rs. 10,00,000 under Rule 25 of Central Excise Rules, 2002. The appeal was solely against this penalty.

Discussion:
The appellant argued they believed clearances under the invalid EPCG license could be made without duty payment, informing the Jurisdictional Superintendent each time. The clearances were shown under the wrong category in their returns. The Department's inquiry led to the appellant paying the full duty liability and interest before the show cause notice was issued. No fraud or suppression was alleged in the notice. The Tribunal noted the appellant's cooperation and lack of malafide intent.

Decision:
After considering the facts, the Tribunal found no malafide intent on the appellant's part. The penalty was set aside, and the appeal was allowed. The judgment was pronounced on 02/6/2016.

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