2018 (3) TMI 847 - AT - Central Excise

Penalty u/r 26 of CER, 2002 - availment of irregular CENVAT credit - Held that - if no demand survives on main appellant, the question of imposing penalty under Rule 26 of Central Excise Rules, 2002, on the present appellant will not stand scrutiny of law - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Early hearing application for out of turn hearing of the appeal.
2. Imposition of penalty under Rule 26 of the Central Excise Rules, 2002.

Issue 1: Early Hearing Application for Out of Turn Hearing of the Appeal

The appellant filed an early hearing application against Order-in-Original No. 20/2011 (C.E) Commr. dated 31.10.2011. The application was based on the grounds that the demands confirmed in the impugned order were contested by the main appellant in a separate appeal, which was allowed, and that the Revenue had launched a prosecution against the applicant. After considering the application, the Tribunal allowed the out of turn hearing of the appeal and proceeded with the disposal of the case.

Issue 2: Imposition of Penalty under Rule 26 of the Central Excise Rules, 2002

The appeal was filed by the appellant against the impugned order, challenging the imposition of a penalty under Rule 26 of the Central Excise Rules, 2002, by the Adjudicating Authority. The appellant argued that the findings of the Adjudicating Authority were erroneous and that there was no manufacturing activity despite the issuance of Central Excise invoices for clearances of dutiable goods. The Tribunal noted that the demands and penalties were imposed on the main appellant, M/s Finecab Wires & Cables Pvt. Ltd., and its Managing Director in a separate appeal. The Tribunal further observed that since the demands on the main appellant were set aside in the previous appeal, the imposition of penalty on the present appellant would not stand scrutiny of law. Consequently, the Tribunal set aside the impugned order imposing the penalty under Rule 26 of the Central Excise Rules, 2002, and allowed the appeal in favor of the appellant.

This judgment by the Appellate Tribunal CESTAT Hyderabad addressed the early hearing application and the imposition of penalty under Rule 26 of the Central Excise Rules, 2002. The Tribunal allowed the out of turn hearing of the appeal based on the grounds presented by the appellant and ultimately set aside the impugned order imposing the penalty, considering the previous decision in the appeal of the main appellant.