2016 (2) TMI 558 - AT - Central Excise

Denial of exemption Notification No. 6/2002-CE - penalty imposed under Rule 26 of Central Excise Rules 2002 - Held that - On perusal of the judgment of this Tribunal in the case of Relpol Plastic Products Ltd. (2013 (11) TMI 1118 - CESTAT MUMBAI ) against the very same impugned order we find that the demand has been dropped. Therefore the penalty under Rule 26 imposed on the present appellant which is consequential to the duty demand on M/s. NOCIL (Now known as Relpol Plastic Products Ltd.) is not sustainable. Penalty set aside. Appeal is allowed with consequential relief if any in accordance of law. - Decided in favour of assessee

Summary

Issues:
Appeal against excise duty demand and penalty under Rule 26 of Central Excise Rules, 2002 based on Order-in-Original No. 14/2006/C dated 29/12/2006.

Analysis:

1. Excise Duty Demand and Penalty Imposition:
The appeal was made against Order-in-Original No. 14/2006/C dated 29/12/2006, where the Ld. Commissioner demanded excise duty from M/s NOCIL by denying the exemption Notification No. 6/2002-CE. A penalty of five lakhs was imposed on the appellant under Rule 26 of Central Excise Rules, 2002. The appellant contested the penalty, arguing that in a similar case involving M/s. NOCIL, the duty demand had been dropped, and the appeal was allowed in the judgment of the Tribunal. The appellant claimed that since the duty demand on M/s. NOCIL was set aside, the penalty on the present appellant was not sustainable.

2. Arguments and Findings:
The appellant's counsel highlighted the Tribunal's judgment in the case of Relpol Plastic Products Ltd. vs. Commr. of C. Ex, Nagpur - 2013-TIOL-1433-CESTA-MUM, where the demand was dropped against the same impugned order. In contrast, the Ld. Asstt. Commissioner representing the revenue reiterated the findings of the impugned order. After careful consideration of both sides' submissions, the Tribunal examined the judgment in the case of Relpol Plastic Products Ltd. and noted that the demand had been dropped in that case. Consequently, the penalty imposed on the present appellant, which was linked to the duty demand on M/s. NOCIL, was deemed unsustainable. Therefore, the Tribunal set aside the penalty under Rule 26 and allowed the appeal with any consequential relief as per the law.

3. Conclusion:
In conclusion, the Tribunal ruled in favor of the appellant, setting aside the penalty imposed under Rule 26 of the Central Excise Rules, 2002. The decision was based on the precedent set in the case of Relpol Plastic Products Ltd., where the duty demand had been dropped. The Tribunal's decision provided relief to the appellant in accordance with the law.