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Issues: (i) Whether the appellant was entitled to verification of its claim for CENVAT credit on production of supporting documents despite not contesting the confirmed duty demand; (ii) Whether penalty under Rule 26 of the Central Excise Rules, 2000 could be sustained against a company when equal penalty had already been imposed on the connected assessee under section 11AC.
Issue (i): Whether the appellant was entitled to verification of its claim for CENVAT credit on production of supporting documents despite not contesting the confirmed duty demand.
Analysis: The appellant did not dispute the duty confirmed in the impugned order, but sought a direction for consideration of its CENVAT credit claim if documents were produced. The request was found reasonable, and the adjudicating authority was directed to verify the CENVAT claim on production of documents within the stipulated period. No further time was to be granted, and the matter would stand closed if the documents were not produced within that period.
Conclusion: The claim for CENVAT credit was directed to be verified on production of documents in favour of the assessee, subject to the time limit fixed by the Tribunal.
Issue (ii): Whether penalty under Rule 26 of the Central Excise Rules, 2000 could be sustained against a company when equal penalty had already been imposed on the connected assessee under section 11AC.
Analysis: The Tribunal noted that an equal penalty had already been imposed under section 11AC in the connected proceedings and that a penalty under Rule 26 could not be imposed on a company. On that basis, the penalty of one lakh rupees imposed on the company was held unsustainable.
Conclusion: The penalty under Rule 26 was set aside in favour of the assessee.
Final Conclusion: One appeal was rejected with a limited direction for verification of CENVAT credit, while the connected appeal was allowed by setting aside the penalty imposed under Rule 26.
Ratio Decidendi: A claim for CENVAT credit may be directed to be verified on production of documents, and a penalty under Rule 26 of the Central Excise Rules, 2000 cannot be sustained against a company in the stated circumstances.
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