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2018 (6) TMI 311 - AT - Central ExcisePenalty u/s 11AC read with Rule 15(2) of the CCR 2004 - no appeal preferred against the said order - Held that - The adjudicating authority by the order-in-original has only imposed penalties under Section 11AC read with Rule 15(2) of the CENVAT Credit Rules, 2004. It seems that against the said order no appeal has been preferred by the Revenue before the first appellate authority - In the absence of any appeal from the Revenue, the impugned order imposing penalty under Rule 15(1) of the CENVAT Credit Rules, 2004 seems to be incorrect, more so, when there is no show cause notice issued by the first appellate authority to the appellant for imposition of such penalty under Rule 15(1) of CCR 2004 - appeal allowed - decided in favor of appellant.
Issues involved:
Contestation of penalty imposed by first appellate authority under Section 11AC read with Rule 15(2) of the CENVAT Credit Rules, 2004, imposition of penalty under Rule 15(1) of CENVAT Credit Rules, 2004 without challenge, absence of appeal from Revenue against the order-in-original, sustainability of penalty imposed by first appellate authority. Analysis: 1. The appeal was brought against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals - II), Pune, dated 31/10/2017. The appellant contested the penalty imposed by the first appellate authority, arguing that the adjudicating authority confirmed the demand along with interest, which had been paid, and imposed a penalty under Section 11AC read with Rule 15(2) of the CENVAT Credit Rules, 2004. The first appellate authority set aside the penalty under Section 11AC but imposed a penalty under Rule 15(1) of the CENVAT Credit Rules, 2004, which was not challenged by the Revenue. 2. The Tribunal noted that there was no appeal from the Revenue against the order-in-original, where penalties were imposed only under Section 11AC read with Rule 15(2) of the CENVAT Credit Rules, 2004. The Tribunal found it incorrect for the first appellate authority to impose a penalty under Rule 15(1) without a show cause notice to the appellant. Therefore, the Tribunal held that the penalty of Rs. 4,05,000/- imposed by the first appellate authority was unsustainable and set it aside. 3. Upon considering the arguments presented, the Tribunal found merit in the submissions made by the appellant's counsel. As there was no appeal from the Revenue against the penalties imposed under Section 11AC read with Rule 15(2) of the CENVAT Credit Rules, 2004, the imposition of a penalty under Rule 15(1) without proper procedure was deemed incorrect. Consequently, the Tribunal allowed the appeal to the extent that the impugned order imposing the penalty under Rule 15(1) was set aside. 4. In conclusion, the Tribunal set aside the impugned order to the extent contested before it and allowed the appeal in favor of the appellant, highlighting the incorrect imposition of a penalty under Rule 15(1) of the CENVAT Credit Rules, 2004 without proper procedure and absence of appeal from the Revenue against the penalties imposed under Section 11AC read with Rule 15(2) of the CENVAT Credit Rules, 2004.
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