Penalty under Cenvat Credit law fails where regular returns show no suppression of facts.

Penalty under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 was held unsustainable because the assessee had regularly filed ER-1 and ST-3 returns, negating suppression of facts. Without suppression, the statutory basis for equal penalty was not established. The Tribunal accepted the Commissioner (Appeals)'s view and found no ground to interfere with the Revenue's challenge, so the penalty remained set aside.

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Issues: Whether the penalty imposed under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 was sustainable in the absence of suppression, and whether the Revenue appeal deserved interference.

Analysis: The respondent had regularly filed ER-1 and ST-3 returns, and on that basis the Commissioner (Appeals) held that there was no suppression of facts. In the absence of suppression, the foundation for imposing equal penalty under Section 11AC read with Rule 15 was not made out. The Tribunal found the Commissioner (Appeals)'s view sustainable and saw no reason to disturb it.

Conclusion: The penalty was rightly set aside and the Revenue's challenge failed.

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