Penalty under a different CENVAT rule cannot be imposed without Revenue appeal or prior notice to the assessee.

The first appellate authority could not sustain a penalty under Rule 15(1) of the CENVAT Credit Rules, 2004 where the original order had imposed penalty only under Section 11AC read with Rule 15(2), no appeal had been filed by Revenue, and no show cause notice had been issued to the assessee for penalty under Rule 15(1). In these circumstances, the appellate authority's alteration of the penalty basis was held unsustainable, and the penalty under Rule 15(1) was set aside in favour of the assessee.

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Issues: Whether the penalty imposed by the first appellate authority under Rule 15(1) of the CENVAT Credit Rules, 2004 was sustainable when the original order had imposed penalty only under Section 11AC read with Rule 15(2) of the CENVAT Credit Rules, 2004 and no appeal had been filed by Revenue.

Analysis: The original adjudication had imposed penalty only under Section 11AC read with Rule 15(2) of the CENVAT Credit Rules, 2004. The first appellate authority, without any appeal from Revenue and without issuing a show cause notice to the appellant for penalty under Rule 15(1), altered the position by imposing a different penalty. In the absence of a Revenue challenge and in the absence of notice to the appellant, such imposition was held to be unsustainable.

Conclusion: The penalty under Rule 15(1) of the CENVAT Credit Rules, 2004 was set aside and the issue was decided in favour of the assessee.

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