2026 (4) TMI 946

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....hat the appellants were engaged in manufacture of 'Cadbury Perk with Glucose Energy' on job work basis for M/s Cadbury India Ltd and were receiving conversion charges. There was certain dispute regarding classification of said product and the department felt that their products were not eligible for availing benefit of concessional rate of duty under Notification No. 03/2006-CE. On adjudication, the adjudicating authority classified the product under the Chapter sub-heading 19053290 as 'coated wafers - other than wafer biscuits' and denied the benefit of concessional rate of duty under Notification No. 12/2012-CE dt.17.03.2012 and also confirmed demand of Rs.4,19,55,168/- and also imposed equal penalty. 3. Learned Advocate for the appell....

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....he requirement of section 11AC is a condition subject to which power under Rule 25 can be exercised and therefore, once the Tribunal, in its earlier order, had categorically held that section 11AC is not attracted, the question of invoking Rule 25 does not even arise. He has also submitted that levy of penalty was not an issue in appeal before the Hon'ble Supreme Court. 5. On the other hand, learned AR has essentially submitted that impugned order is an order passed in denovo proceedings and in the earlier rounds, the matter had already reached up to Hon'ble Supreme Court and therefore, has attained finality. Even the earlier Tribunal order remanded the matter, which was contested by the appellant, by upholding the demand and has only re....

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....bvious that what was set aside is penalty under section 11AC as also penalty under Rule 26 and there was no setting aside of penalty under Rule 25. Though it is an admitted fact that in view of clear observation and setting aside of section 11AC, the element of fraud, collusion, willful misstatement, etc., are not present in this case. Therefore, it is to be examined whether in the absence of such element, can penalty be imposed under Rule 25 or otherwise. The provisions of Rule 25 are as under. "25. Confiscation and penalty. (1) Subject to the provisions of section 11-AC of the Act, if any producer, manufacturer, registered person of a warehouse [or an importer who issues an invoice on which CENVAT credit can be taken,] [....

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....les of natural justice." 9. A plain reading of this rule would clearly show that as per Rule 25(1)(d), if any producer, manufacturer, registered person of a warehouse or an importer contravenes any of the provisions of these rules or the notifications issued under these rules with an intent to evade payment of duty, penalty is leviable. Therefore, for levy of penalty under this provision in terms of Rule 25(1)(d), intent to evade payment of duty is to be present. However, we also note that in respect of situations covered by Rule 25(1)(a), (b) and (c), there is no such express provisions in the rules to establish any malafide intent or deliberate suppression, etc., and a mere action covered under the said category would be sufficient for....