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2024 (2) TMI 1014 - CESTAT NEW DELHILevy of penalty u/r 26 of the Central Excise Rules, 2002 - clandestine manufacture of Pan Masala - recovery of duty alongwith interest and penalty - HELD THAT:- The penalty under Rule 26 can be imposed if one is concerned in a manner indicated in the Rule with goods which were liable for confiscation or was in any way concerned such goods or any person who is connected with issue of invoices without delivering goods so as to enable the person to enable the other person to avail CENVAT credit incorrectly. In this appeal, no penalty has been imposed with respect to the confiscation of the goods (first SCN). The second SCN was only concerned with recovery of duty. It is in this SCN, penalty of Rs. 10,00,000/- was imposed on the appellant under Rule 26. This Rule does not provide for imposing penalty on the ground that no excise duty was not paid or short paid. In the first SCN, where there was confiscation of goods, no penalty was imposed on the appellant by the adjudicating authority and in the proceedings related to the second SCN, where duty is to be demanded, penalty was imposed under Rule 26 which is clearly beyond the scope of this Rule - Since there is no basis for imposing penalty on the appellant under Rule 26 in the second SCN (which neither involved confiscation of goods nor issue of invoices without supplying goods), the penalty cannot be sustained. Appeal allowed.
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