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Does the SM has the power to decide breach of bylaw and issue NTC without the SC vote?
Yes, they do unless the strata committee instructs them not to do so. If they issue an NTC, they have to state which by-law has been breached and how.
Can we be the one to escalate to the tribunal as we believe we have a case here?
Why would you do that? You are not required to prove you are right, unless they take you to the Tribunal.
If I were you I’d tell the strata manager and committee that this is harassment, they are in the wrong, and they should take your parents to the tribunal if they are confident they have a case. And if they do so, you will seek costs. Otherwise they should leave your parents to live in peace.