2017 (1) TMI 226

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....fered it to redeem on payment of redemption fine of Rs. 2 lakhs.  The matter was agitated before the Commissioner (Appeals), who observed as follows: - "10.  The adjudicating authority confirms the demand of Rs. 3,25,000/-. However, the show-cause notice merely states that Central Excise duty of Rs. 3,20,000/- BED and Rs. 5000/- education cess deposited vide TR-6 challan No. 18 dated 25.1.2006 of which Rs. 35,912/- BED and Rs. 593/- education cess against the clearances under invoices No. 211 dated 14.12.2005, No. 212 dated 14.12.2005, No. 213 dated 18.12.2005 and No. 214 dated 19.12.2005 should not be appropriated. There is no demand of Rs. 3,25,000/-. What has been demanded is only the duty of Rs. 35,912/- BED and Rs. 593/- E....

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....use notice and recognizing the fact that there was no demand of duty but only the order for appropriate of duty already paid, Commissioner (Appeals) has set aside the demand of Rs. 2,88,495/-. He argued that in these circumstances, imposition of penalty equivalent to the entire original demand of Rs. 3,25,000/- under Rule 25 of the Central Excise Rules cannot be imposed. 3.  Learned AR informed that the order of Commissioner (Appeals) has been accepted and not challenged. He, however, pointed out that the penalty under Rule 25 of the Central Excise Rules is not demanded on account of demand of duty but for other reasons. He pointed out to the various events involving overdrawal in PLA to the extent of Rs. 3,02,935/- and Rs. 3,676/- ....

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....required under section 6 of the Act; or (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or [rupees two thousand], whichever is greater.  (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice." ....