Tribunal sets aside penalty under Central Excise Rules, 2002 for input supplier.

The Tribunal ruled in favor of the appellant, an input supplier, setting aside the penalty imposed under Rule 26 (2) of the Central Excise Rules, 2002. The appellant's appeal was allowed based on establishing the genuineness of the transaction regarding the purchase and receipt of inputs, discrediting the Revenue's allegations. Citing previous decisions and legal precedents, the Tribunal granted consequential benefits to the appellant, similar to cases where penalties under Rule 26 were set aside by higher courts.

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Issues:
1. Imposition of penalty under Rule 26 (2) of Central Excise Rules, 2002 on the appellant.

Analysis:
The judgment revolves around the imposition of a penalty under Rule 26 (2) of the Central Excise Rules, 2002 on the appellant, who is an input supplier. The primary issue is whether the penalty was rightly imposed. The appellant supplied inputs to M/s. Angel Pipes and Tubes Pvt. Ltd., Rajasthan, and a penalty of Rs. 10 lakh was imposed on the appellant due to the disallowance of cenvat credit in the hands of the input receiver. The Tribunal considered the facts and previous decisions to reach a conclusion.

The Tribunal noted that a similar case involving the input receiver, Angel Pipes and Tubes Pvt. Ltd., was disposed of in favor of the receiver. The Tribunal allowed the appeal of Angel Pipes and Tubes, emphasizing that the appellant had manufactured dutiable finished goods using the disputed inputs and cleared them after paying duty. The Tribunal found that the appellant had established the genuineness of the transaction regarding the purchase and receipt of inputs, thereby discrediting the Revenue's allegation of non-receipt of duty-paid raw materials. Consequently, the Tribunal set aside the impugned order against Angel Pipes and Tubes, providing them with consequential benefits.

Moreover, the Tribunal highlighted that in other similar cases, the appellant's appeal against the penalty under Rule 26 was heard and allowed by the Ahmedabad Bench - Division Bench of the Tribunal. The penalty was set aside in that case as well. This decision was upheld by the Hon'ble Gujarat High Court and further confirmed by the Hon'ble Supreme Court. Citing this precedent, the Tribunal allowed the current appeal and set aside the impugned order against the appellant, granting them consequential benefits as per the law.

In conclusion, the Tribunal, after considering the facts, previous decisions, and legal precedents, ruled in favor of the appellant, setting aside the penalty imposed under Rule 26 (2) of the Central Excise Rules, 2002. The appellant was granted consequential benefits in accordance with the law.

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