I have had my beetle running for a few minutes to test out my brakes and change it around the garage. About half hour later I noticed after being nearly burnt my hand it was to hot to touch. Mind you ignition was on after running engine to check lights etc. this normal or am I getting some wires crossed or is the coil starting to fail?

Ignition on without running will make the coil run hot. Feel the coil after a normal drive, and see what it feels like. The coil will feel quite warm, as the entire engine runs at over 100 degrees.

If the ignition is left on the coil will get hot as hellbus said, but it shouldn't be too hot to touch.

Check that the condensor and points in the dizzy are ok, sometimes if the they are shot it can cause the coil to ground out and get uber hot