Cenvat credit admissibility bars penalty under Rule 13 where the credit itself was already upheld as proper.

Penalty under Rule 13 of the Cenvat Credit Rules was held unsustainable where the assessee's availment of Cenvat credit on cranes had already been upheld as admissible and that finding remained unchallenged by the Revenue. Once the credit itself stood validated, the foundation for imposing penalty disappeared. Authorities cited for penalty were distinguished because they involved clear wrongful availment or breach, which was not present here. The order remanding the matter to the Original Authority for penalty was therefore not maintainable.

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Issues: Whether penalty could be imposed under Rule 13 of the Cenvat Credit Rules when the assessee's availment of Cenvat credit had already been upheld as justified.

Analysis: The appeal turned on the effect of the earlier appellate finding that Cenvat credit on the cranes was admissible. That finding remained unchallenged by the Revenue and therefore stood in favour of the assessee. Once the credit itself had been held to be properly available, the basis for directing imposition of penalty disappeared. The authorities relied upon for sustaining penalty were distinguished as cases involving clear wrongful availment or violation, which was not the position here.

Conclusion: Penalty was not imposable, and the order remanding the matter to the Original Authority for imposition of penalty was unsustainable.

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