TaxTMI 
TaxTMI 
2019 (5) TMI 711
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....e First Schedule of the Central Excise Tariff Act, 1985. The appellant had submitted Letter of Undertaking for removal of excisable goods without payment of duty to units located in Special Economic Zone and the same was accepted by the Deputy Commissioner, LTU, Mumbai. During the scrutiny of ER-1 returns filed by appellant for the month from October, 2009 to October, 2010, it was observed that the appellant had cleared cement without payment of duty to SEZ units but failed to produce copy of ARE-1's within 24 hours of clearance of goods and also failed to produce proof of export within 45 days of export as prescribed under the said Notification. Thereafter, two SCNs dated 31.08.2010 and 04.02.2011 were issued proposing to recover duty amou....
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....mission. He further submitted that imposition of penalty under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944 is not legally tenable because the appellant had cleared the cement under the cover of ARE-3 for export to certain parties located in SEZ and they have made all its efforts to obtain the re-warehousing certificate but could not submit the same which is only a procedural lapse for which the appellant being a bona fide assessee has paid duty along with interest which fact is not disputed and is recorded in the impugned order. He further submitted that the penalty under Section 11AC read with Rule 25 is not warranted in the present case because the ingredients required for imposition of....
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.... He further submitted that Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 can be invoked only when the contraventions are with regard the Central Excise Act or Rules whereas in the present case, there is no contravention of Central Excise Act or Rules and hence penalty cannot be imposed by invoking the provisions of Section 11AC and Rule 25. He further submitted that for imposition of penalty, the presence of "mens-rea" is mandatory requirement and in the absence of which imposition of penalty is unjustified. For this submission, he relied upon the following decisions: • Tamilnadu Housing Board v. CCE, Madras - 1994 (74) ELT 9 (SC). • Hindustan Steel Ltd. v. State o....
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....om the Department with intent to evade payment of duty. Further, I find that it is a case of non-submission of proof of export which is a procedural lapse and accordingly the appellant has paid the duty along with interest to the extent of not submitting the proof of export. Further, I find that the penalty envisaged under Section 11Ac read with Rule 25 is not warranted in the present case as the ingredients required for imposition of penalty such as fraud, wilful mis-statement, collusion or suppression of fact with intent to evade payment of duty is absent in the present case. Further, I find that the Commissioner (Appeals) in the impugned order has held that once it is established that the appellant has committed breach of mandatory provi....