Delayed excise duty disclosed in returns attracts only limited penalty, not harsher Rule 25 punishment.

Belated payment of central excise duty, where the default was disclosed in monthly returns and the duty was later paid with interest, did not justify penalty under Rule 25 of the Central Excise Rules, 2002. The Tribunal applied the settled view that such a case is not one of concealed liability or the stricter misconduct associated with Section 11AC, so the harsher penalty was unwarranted. Instead, the proper penalty provision was Rule 27, which permits only a limited penalty up to Rs. 5,000. The operative effect is that transparent delayed payment attracts only the lesser penal consequence.

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Issues: Whether, on delayed payment of central excise duty that was later paid with interest and disclosed in monthly returns, penalty was leviable under Rule 25 or only the limited penalty under Rule 27 of the Central Excise Rules, 2002.

Analysis: The delayed duty payments were not cases of concealed liability, as the defaults were reflected in the returns and the duty was subsequently discharged with interest. The settled view applied by the Tribunal was that such belated payment under Rule 8 does not warrant penalty under Rule 25, and the proper penal provision is Rule 27, which prescribes a maximum penalty of Rs. 5,000. The reasoning also rejected the attempt to link Rule 25 penalty with the stricter ingredients associated with Section 11AC.

Conclusion: Penalty under Rule 25 was not sustainable, and only the penalty under Rule 27 up to Rs. 5,000 was exigible.

Ratio Decidendi: Where duty is paid belatedly but the default is disclosed and the duty is subsequently paid with interest, the case attracts only the limited penalty under Rule 27 and not the harsher penalty under Rule 25.

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