Rule 26 penalty could not survive after the connected adjudication was set aside in related appeals.

Penalty under Rule 26 of the Central Excise Rules, 2002 was challenged because the same adjudication had already been set aside in connected appeals against the main noticee and other persons. Since the impugned order no longer survived for those co-noticees, the penalty on the appellant, which arose from the same order, could not be sustained. The Tribunal accordingly set aside the penalty and allowed the appeal.

---

---

Issues: Whether the penalty imposed upon the appellant under Rule 26 of the Central Excise Rules, 2002 was sustainable in view of the Tribunal's earlier order setting aside the same impugned order against the other noticees.

Analysis: The appeal concerned only the penalty imposed on the appellant. The impugned order had already been set aside by the Tribunal in the connected appeals arising from the same order, including the demand against the main noticee and the penalties on the other persons. In these circumstances, the penalty against the appellant, being part of the same adjudication, could not be sustained.

Conclusion: The penalty imposed upon the appellant was set aside and the appeal was allowed.

---