Rule mismatch in penalty proceedings supports unconditional stay where appellate authority introduced a fresh basis

Penalty proceedings grounded in Rule 15 could not be expanded in appeal by invoking Rule 6(b)(ii) for the first time, because the show cause notice and adjudication had proceeded only on Rule 15 concerning wrong availment or utilisation of Cenvat credit. Rule 6(b)(ii), which addresses issuance of excise invoices to enable an ineligible benefit, operated in a different field, and the appellate authority could not introduce that fresh basis to the appellant's prejudice. The appellant therefore established a prima facie case for unconditional stay, and the stay petition was allowed.

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Issues: Whether the penalty demand required pre-deposit when the penalty had been proposed and imposed under Rule 15, but the appellate authority introduced Rule 6(b)(ii) for the first time.

Analysis: The show cause notice and the adjudication order proceeded on Rule 15, which applies where Cenvat credit is wrongly taken or utilized. Rule 6(b)(ii) operates in a different field, namely where excise invoices are issued so that the buyer may avail an ineligible benefit. The appellate authority could not enlarge the scope of the proceedings by introducing a fresh basis at the appellate stage to the prejudice of the appellant. On that basis, the appellant was held to have a prima facie case for unconditional stay.

Conclusion: The stay petition was allowed unconditionally in favour of the appellant.

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