Appropriation of duty and interest paid against confirmed liability, with Rule 25 penalty sustained under the excise framework.

Duty and interest already paid must be appropriated against the adjudicated liability, so no further recovery can be made for the same amount once the payment is taken into account. Penalty under Rule 25 of the Central Excise Rules, 2002 may still be sustained where the recorded contravention attracts that provision, including cases involving intent to evade duty, and the fact that a separate penalty under Section 11AC was not sustained does not by itself unsettle Rule 25 relief. The commentary therefore treats the confirmed demand as sustained, with payment adjustment allowed and the Rule 25 penalty maintained.

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Issues: (i) Whether the duty and interest already paid by the appellant were liable to be appropriated against the confirmed demand and whether any further demand could be raised. (ii) Whether penalty under Rule 25 of the Central Excise Rules, 2002 was sustainable in the facts of the case.

Issue (i): Whether the duty and interest already paid by the appellant were liable to be appropriated against the confirmed demand and whether any further demand could be raised.

Analysis: The confirmed duty and interest were not disputed on merits. Since the amounts had already been paid, they were required to be adjusted against the adjudicated liability. Once such payment is taken into account, no further recovery could be made towards the same confirmed duty and interest.

Conclusion: The already paid duty and interest were directed to be appropriated and no further demand could be raised on that account.

Issue (ii): Whether penalty under Rule 25 of the Central Excise Rules, 2002 was sustainable in the facts of the case.

Analysis: Rule 25 permits penalty where the specified contraventions occur, and clause (d) specifically covers contraventions committed with intent to evade duty. The record showed that the earlier setting aside of penalty under Section 11AC of the Central Excise Act, 1944 did not result in setting aside of penalty under Rule 25. The adjudicating authority had limited the penalty to 10% of the duty, and the Tribunal found no infirmity in invoking Rule 25 on that basis.

Conclusion: The penalty under Rule 25 was upheld.

Final Conclusion: The demand of duty and interest was sustained, the amount already paid was ordered to be appropriated, and the penalty under Rule 25 was maintained, resulting in only limited relief to the appellant.

Ratio Decidendi: Where duty and interest already stand paid, they must be appropriated against the confirmed liability, and penalty under Rule 25 can be sustained within the statutory framework even where the penalty is confined to a lower quantification consistent with the governing provisions.

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