Duplicate excise penalty under CENVAT Credit Rules set aside where Section 11AC penalty already addressed the breach.

An additional penalty under Rule 13 of the CENVAT Credit Rules, 2002 was found unsustainable where penalty had already been imposed under Section 11AC of the Central Excise Act, 1944. The Tribunal noted that the substantive issue was covered by precedent and that duty, interest, and part of the penalty had already been paid. On those facts, it held that the Section 11AC penalty sufficiently met the ends of justice and there was no justification for a further penalty under Rule 13. The additional penalty was set aside.

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Issues: Whether the additional penalty imposed under Rule 13 of the CENVAT Credit Rules, 2002 was sustainable when penalty had already been imposed under Section 11AC of the Central Excise Act, 1944.

Analysis: The appeal was heard on the basis that the substantive issue was covered by precedent and that duty, interest, and part of the penalty had already been paid. The Tribunal held that the penalty under Section 11AC sufficiently met the ends of justice. In the facts and circumstances, it found no justification for imposing a further penalty under Rule 13 of the CENVAT Credit Rules, 2002.

Conclusion: The additional penalty under Rule 13 was set aside.

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