Penalty for delayed export not leviable when delay was intimated, condoned, and export compliance was substantially completed.

Penalty under Rule 25 of the Central Excise Rules was not warranted where the exporters had intimated the department about the delay, sought condonation, produced proof of export, and the duty demand was dropped. The goods were either exported or diverted for home consumption with departmental permission, and the delay was treated as condoned. In the absence of deliberate violation, revenue loss, or any substantive non-compliance with the export condition, the alleged breach of the notification did not justify penal action. The substantive export obligation had been substantially complied with, so penalty was held not leviable.

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Issues: Whether penalty under Rule 25 of the Central Excise Rules was sustainable where the exporters had intimated the department, sought condonation of delay, produced proof of export, and the duty demand had been dropped.

Analysis: The goods covered by the show cause notice were either exported or diverted for home consumption with departmental permission, and the delay in export was intimated to the department and treated as condoned. The duty demand was dropped, and no case of deliberate violation or revenue loss was established. In such circumstances, the statutory breach alleged under the export notification did not justify penal action, particularly when the substantive obligation had been substantially complied with and the export was completed.

Conclusion: Penalty under Rule 25 of the Central Excise Rules was not leviable.

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