TaxTMI 
TaxTMI 
2017 (2) TMI 717
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....uantity of 67.475 Mts., of Ingots on two different dates, viz., 24.12.2006 and 26.12.2006, without there being corresponding statutory invoice being raised for the said clearance. Apprehending clandestine removal of the said quantity without proper accounting, the relevant records were seized by the officers of the inspection unit. The statement recorded from the Accounts-in-charge, revealed that due to the non-availability of the Managing Partner, who is the authorised signatory of the invoice, due to urgent requirement of the purchaser, viz., M/s.NGA Steels, the quantity was supplied without the necessary invoices. 3. On 27.12.2006, the officers also visited the factory premises of the appellant factory, wherein on physical verification of the stocks and accounts, excess stock was detected. Explanation in tune with the one offered by M/s.Krishna Steels was offered by the Director of the appellant factory. 4. Since it was evident from the facts on record that both the seller and buyer had contravened the provisions of the Central Excise Rules, 2002, action was sought to be initiated against the said companies. Accordingly, for contravening Rules 25 and 26 of the Central Exci....
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....n Shri A.Rajarajan, Director of M/s.NGA Steels Private Ltd., in terms of Rule 26 of the Central Excise Rules ibid. (viii) I impose a penalty of Rs. 10,000/- on Shri K.Duraisamy, Account-in-charge of M/s.Sri Krishna Alloys, Sankari, in terms of Rule 26 of the Central Excise Rules, ibid." 6. Aggrieved against the said order of the Assessing Officer, viz., Assistant Commissioner of Central Excise, the appellant herein as well as M/s.Sri Krishna Alloys, preferred appeals before the Commissioner of Central Excise. After affording opportunity to the parties, while the Commissioner (Appeals) upheld the order of the Assessing Officer insofar as the demand under Section 11A (1) of the Central Excise Act along with interest on duty under Section 11AB of the Act imposed on M/s. Sri Krishna Alloys, however penalty imposed under Rule 25 of the Central Excise Rules, imposed on M/s.Sri Krishna Alloys, was reduced to Rs. 50,066/-. Insofar as the present appellant is concerned, while penalty under Rule 25 of the Central Excise Rules was reduced to Rs. 50,066/-, however confiscation of the goods as ordered under Rule 25 of the Central Excise Rules was upheld, while redemption fine in lie....
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....cise Rules vehemently contended that once the penalty is set aside as the appellant is not falling within the categories enumerated under Rule 25 and, therefore, redemption fine is equally liable to be set aside as there would be no revenue loss to the exchequer. The Tribunal, having found that levy of penalty is unsustainable as the appellant does not fall under any of the categories listed under Rule 25 of the Central Excise Rules, has, however, gone on a tangent by upholding the redemption fine on the basis of the acceptance of the offence of clearance of goods without invoice by M/s. Sri Krishna Alloys, which is per se impermissible. The act of M/s. Sri Krishna Alloys in clearing the goods without invoice cannot be put against the appellant herein as the appellant would be entitled to take cenvat credit on any inputs received by them and, as stated earlier, there would be no revenue loss to the exchequer. 10. Learned counsel appearing for the appellant placed reliance on the following judgments to drive home the point that once the penalty imposed under Section 25 of the Central Excise Rules is set aside, no redemption fine could be imposed on the appellant :- "i) B....
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....f redemption fine in lieu of confiscation and answering the substantial questions of law framed for consideration, it would be trite to advert to Rule 25 of the Central Excise Rules, which has been put in issue to contend that redemption fine is not leviable, the Tribunal having set aside the penalty imposed on the appellant. 14. Rule 25 of the Central Excise Rules deals with confiscation and penalty and for better clarity, the same is extracted hereunder :- "(1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer, - (a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate 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, ....
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.... this Court is not inclined to look into the issue as is reflected in the eyes of the Department. The Tribunal having held that the act of the appellant does not fall within any of the four categories as envisaged under Rule 25, it is submitted by the appellant that at best it could be termed as technical procedural lapse, which act would not warrant imposition of penalty. The contention, as advanced by the appellant, merits acceptance. A cursory reading of Rule 25 of the Central Excise Rules reveal that if any producer, manufacturer, registered person of a warehouse or a registered dealer contravenes the provisions as envisaged under sub-rules (a) to (d) of Rule 25, then confiscation and penalty stand attracted. In the case on hand, the appellant has received the goods without invoice, which is a statutory requirement. The goods are mere raw material to be used in a manufacturing/production activity, that is being carried on by the appellant. Such being the undisputed factual position, as held by the Tribunal, the appellant will not fall within any of the four categories as envisaged under Rule 25 of the Central Excise Rules. 17. However, confiscation would still survive on con....
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....doubts, it is hereby declared that - (1) the provisions of this section which the order determining the duty under?shall also apply to cases in sub-section (2) of section 11A relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President; (2) any amount paid to the credit of to the date of communication of the order referred?the Central Government prior to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person.]" 18. From a reading of Section 11AC, it is unambiguously clear that where any duty has not been paid, more particularly with an intention to evade payment of duty, the person is liable to pay duty as determined under sub-section (2) of Section 11A and is also liable to pay penalty equal to duty so determined. 19. In the case on hand, there is no dispute that the materials were moved from one place to another place and stored in the destination place without preparation of invoice. The appellant having received the goods without invoice from the seller and stored it within its factory premises, could be deemed to be holding the materials in safe custody on beha....