Rule 25 penalty set aside where duty and interest were paid and no intent to evade was shown.

Equal penalty under Rule 25 of the Central Excise Rules, 2002 was found unjustified where the differential duty and interest had already been paid and the record did not show deliberate intent to evade duty. The duty default arose from budgetary changes, and the factual circumstances did not support a finding of suppression or wilful evasion. On those facts, the penalty was set aside and the appellate order was upheld.

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Issues: Whether penalty under Rule 25 of the Central Excise Rules, 2002 was sustainable when the differential duty and interest had already been discharged and there was no finding of deliberate intent to evade duty.

Analysis: The duty default arose in the context of budgetary changes. The record did not establish that the non-payment was deliberate or that the assessee intended to evade Central Excise duty. The duty liability with interest had already been discharged, and the Commissioner (Appeals) had taken the factual circumstances into account. On those facts, imposition of equal penalty under Rule 25 was found to be unjustified.

Conclusion: Penalty under Rule 25 was not warranted and the order setting it aside was upheld.

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