@JUDGMENTTAG-ORDER
Ashutosh Mohunta , J.@mdashThe present Appeal has been preferred by the Revenue u/s 35G of the Central Excise Act, 1944 impugning the Order dated 3-12-2007 passed by Customs, Excise and Service Tax Appellate Tribunal, New Delhi, whereby the Appeal filed by the Revenue has been dismissed on the question of penalty. However, on the question of interest, it has been partly allowed. The Revenue is not disputing the question of interest and Appeal is confined to the imposition of penalty only. As per the Revenue, the following Questions of Law arise for the consideration of this Court:
(i) Whether penalty under Rule 26 of the Central Excise Rules, 2002 for late payment of duty can be set aside on the ground of requirement of mens rea?
(ii) Whether a case law on applicability of penalty under Rule 25 when mens rea is absent can be made applicable to penalty under Rule 26 whereby penalty is leviable irrespective of mens real
2. Brief facts of the case are that the Respondent-Assessee was required to pay excise duty for the month of August'' 2003 on or before 5-9-2003. The Respondent-Assessee partially deposited the duty before 5*9-2009 but the remaining amount of duty was deposited in three different installments. The Revenue issued Show Cause Notice proposing levy of penalty on account of delayed payment of duty. The Adjudicating Authority vide its Order dated 22-7-2005 imposed penalty of Rs. 9.5 Lac under Rule 26 of the Central Excise Rules, 2002. The Respondent-Assessee filed Appeal before the Commissioner (Appeals), who vide its Order dated 28-10-2005 allowed Appeal of the Respondent-Assessee and set aside the levy of penalty as well as interest. The Revenue assailed the matter before the Tribunal on the ground that the Respondent-Assessee is liable to interest and penalty on account of delayed payment of duty. The Tribunal vide its impugned Order dated 3-12-2007 upheld the Order of Commissioner (Appeals) on the question of penalty. On the question of interest, the Tribunal modified Order of the Commissioner (Appeals).
3. We have heard Counsel for both the parties and perused the record. The contention of the Appellant Department is that irrespective of mens rea penalty should be imposed under Rule 26 on account of delayed payment of duty. The Counsel also contended that the Tribunal has wrongly relied upon its earlier decision in the case of Condor Power Products P. Ltd. v. Commissioner of Central Excise, Faridabad 2007 (210) E.L.T. 137 (Tri. - Del.). The Li. Counsel would submit that the issue involved in the case of Condor Power-Products P. Ltd. was totally different. In the said case penalty was levied under Rule 25 of the Rules on account of delayed payment of duty whereas in the present case, penalty has been levied under Rule 26 of the Rules.
4. The Counsel for the Respondent-Assessee contended that the present issue is squarely covered with the Judgment of this Court in the case of Commissioner of Central Excise, Rohtak v. Dhillon Kool Drinks and Beverages Limited CEA No. 59 of 2006 and Commissioner of Central Excise, Chandigarh v. Sadashiv Ispat Limited CEA No. 137 of 2005. He further submitted that delay in payment of duty occurred due to seizure of record by DRI and arrest of Directors of the Company. The duty was not deposited on being pointed out by Department but they voluntarily deposited the duty.
5. In the judgements cited by Counsel for the Respondent-Assessee, we had already held that penalty cannot be imposed in the absence of mens rea and delay in payment of duty cannot be treated as non-payment of duty with mens rea. In the present case, delay has occurred on account of seizure of record, freezing of accounts by DRI and arrest of Directors of the Company. It is not the case of the Revenue that there was mens rea on the part of Respondent-Assessee in delayed payment of duty. It is not even the case of the Revenue that duty was deposited when it was pointed out by the Revenue. As we have already held in both the cases cited by Counsel for Respondent-Assessee that penalty cannot be imposed merely on account of delayed payment of duty, we find no merit in the present Appeal and the same is dismissed. The question of law is answered in favour of the Respondent-Assessee and against the Revenue.
