Tribunal rules no penalty pre-2007, imposes $9,048 post-2007. Appeals adjust rebate claims.

The tribunal held that no penalty was imposable for the period pre-1.3.2007, but confirmed a penalty of Rs. 9,048 for the post-1.3.2007 period. The appeals related to the adjustment of rebate claims against the penalty imposed were allowed, with an adjustment of Rs. 9,048.

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Issues involved:
1. Imposition of penalty under Rule 26(2) of Central Excise Rules, 2002 for non-supply of inputs along with invoices.
2. Adjustment of rebate claim against penalty imposed.

Analysis:
Issue 1:
The appellant filed an appeal against the penalty imposed under Rule 26(2) of Central Excise Rules, 2002 for not supplying inputs along with invoices to the principal manufacturer. The appellant argued that since they did not deal with the goods liable for confiscation, the penalty should not apply. They cited precedents like Flex Industries Ltd. and Duggar Fiber Pvt. Ltd. to support their contention. The appellant accepted liability for a specific invoice post-1.3.2007. The AR opposed, citing the M S Metals case, stating that penalties can be imposed even without Rule 26(2) for pre-1.3.2007 periods. The tribunal considered both arguments and found no proposal for penalties under Rule 25(1)(d) or 26(1) in the show cause notice. Consequently, the tribunal held that no penalty was imposable for the period pre-1.3.2007, but confirmed a penalty of Rs. 9,048 for the post-1.3.2007 period.

Issue 2:
The appeals related to the adjustment of rebate claims against the penalty imposed. The appellant contended that since the penalty was not imposable, the adjustment was not sustainable, and rebate claims should be allowed. The AR argued that penalties were rightly imposed due to the issuance of invoices without physical dispatch of goods. Citing the M S Metals case, the AR supported the penalty imposition. The tribunal, after considering both sides, allowed the appeals subject to the adjustment of Rs. 9,048, as the part penalty was not sustainable.

In conclusion, the tribunal disposed of the appeal related to penalty imposition, confirming a penalty for the post-1.3.2007 period. The rebate claim appeals were allowed, with an adjustment of Rs. 9,048.

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