Appeal allowed, penalty under Rule 26 set aside due to lack of evidence.

The appeal was allowed, and the penalty imposed under Rule 26 of the Central Excise Rules was set aside. The Tribunal found insufficient evidence to support the allegations, especially in comparison to a similar case where the penalty was overturned. The appellant's settlement of tax dues under the SVLDR Scheme for the same period further supported the decision to set aside the penalty in the interest of justice.

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Issues:
Imposition of penalty under Rule 26 of Central Excise Rules.

Analysis:
The case involved an appeal against the imposition of a penalty under Rule 26 of the Central Excise Rules. The appellant's premises were searched, leading to the recovery of incriminating records related to certain activities from May 2011 to August 2014. The Director of the appellant admitted to receiving inputs from other manufacturers without proper documentation and clearing finished goods without paying duty. A show cause notice was issued, demanding excise duty, interest, and penalty. Another notice was issued to a different entity, M/s Shree Balaji Furnaces (P) Ltd., which was later resolved in favor of the appellant. The Tribunal found insufficient evidence to support the allegations against M/s Shree Balaji Furnaces (P) Ltd., leading to the appeal being allowed and the demand and penalty being set aside. However, the penalty imposed on the present appellant was confirmed, albeit reduced to Rs. 1 lakh.

The appellant had also applied for a one-time settlement of tax dues under the SVLDR Scheme, 2019, related to the same search and seizure period. The appellant paid the tax dues and received a settlement certificate. The appellant argued that, considering the settlement under the SVLDR Scheme and the Tribunal's decision in a similar case, the penalty should be set aside in the interest of justice. The Authorized Representative for the Revenue supported the impugned order confirming the penalty.

After considering the arguments, the Member (Judicial) found that the appellant had settled the dispute for the same period under the SVLDR Scheme, and the Tribunal had previously allowed a similar appeal due to insufficient evidence. Consequently, the Member deemed it appropriate to allow the present appeal and set aside the penalty imposed under Rule 26 of the Central Excise Rules. As a result, the appeal was allowed, and the penalty was overturned.

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