Penalty under rules 25 and 27 of CE Rules 2002

[IMMANUEL NEIHSIAL]

Penalty under rule 25 of central excise rules 2002 has been imposed @15% of the Demand. Now i refrain from imposing penalty under rule 27 of the CE rule 2002. I want to know whether my decision is right or wrong. Can we impose penalties by using both rules 25 and 27 of CE rules 2002 ?

Advice is highly sought on the matter.

Thank you.

[KASTURI SETHI]

Your decision is right. Reply to second query is 'NO'.

[KASTURI SETHI]

Dear Sir,

Rule 25 is subject Section 11 AC . Penalty should not exceed the amount of duty evaded. What is the basis of imposition of penalty of 15% of duty demanded ? Will you please clarify ?

[IMMANUEL NEIHSIAL]

I impose penalty (15%) as the assessee fulfils rule 11AC (d).

Thank you.

[IMMANUEL NEIHSIAL]

The assessee has fulfilled section 11AC(1)(d) of CE Act 1944.

Thank you

[DR.MARIAPPAN GOVINDARAJAN]

Whether the queries is the department officer?

AI Summary

Penalty compatibility under central excise rules: both Rule 25 and Rule 27 should not be imposed; Rule 25 is subject to statutory limits.
Both penalties under Rule 25 and Rule 27 should not be imposed for the same demand; refraining from invoking Rule 27 after applying Rule 25 is appropriate. Rule 25 is subject to the statutory limitation in Section 11AC and a penalty under Rule 25 must not exceed the duty found to be evaded. The penalty percentage was applied on the basis that the assessee satisfied the condition in Section 11AC(1)(d).