9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (2) TMI 1317 - AT - Central ExcisePenalty u/r 26 of CER 2001/2002 and Rule 13/15 of CCR 2002/2004 - whether when the main noticee M/s. HUF have been granted immunity from imposition of penalty by the Settlement Commission, whether penalty can be imposed upon the present appellants, who are charged with colluding and abbeting M/s. HUF? Held that - As per the majority order, the present appeals are not to be allowed on the basis of immunity available to them on account of main noticee having settled the issue before the Settlement Commission and their liability to penal action is to be examined on the basis of merits of each case. As the same have not been discussed, the appeals may be listed for disposal on merits.
Issues Involved:
1. Whether penalties imposed on the appellants are justified when the main noticee has settled the case before the Settlement Commission. 2. The role of each appellant in the fraudulent activities and their liability to penal action. Issue-Wise Detailed Analysis: 1. Immunity from Penalty: The primary issue was whether penalties could be imposed on the appellants when the main noticee, M/s. Minda HUF Ltd., had settled the case before the Settlement Commission and was granted immunity from penalty. The appellants argued that since the main noticee was granted immunity, they should also be exempt from penalties. They relied on the Tribunal’s decision in S.K. Colombowala v. CCE and other similar cases, where penalties on co-noticees were set aside if the main noticee settled the dispute. However, the Tribunal examined the applicability of the decision in S.K. Colombowala and the Supreme Court's ruling in Union of India v. Onkar S. Kanwar. It was noted that the Supreme Court's decision was specific to the Kar Vivad Samadhan Scheme (KVSS) and could not be directly applied to cases settled before the Settlement Commission under the Central Excise Act. The Tribunal emphasized that the term "co-noticee" cannot be interpreted to mean that all parties involved in a single show cause notice automatically receive immunity if one party settles. 2. Role of Each Appellant: The Tribunal analyzed the specific roles of each appellant in the fraudulent activities. The investigation revealed that the appellants issued invoices without actual supply of goods, enabling M/s. Minda HUF Ltd. to avail fraudulent Cenvat credit. The detailed findings included: - Ms. Mamta Garg (M/s. SRG Machines): The unit was engaged in producing steel wire, not automobile lock parts as claimed in the invoices. - Shri Mukesh Garg (M/s. Ajanta Enterprises): The unit was found manufacturing steel wire, not the specified automobile lock parts. - Ms. Aruna Agarwal (M/s. Techno Engineers): The unit did not exist at the given address and was involved in passing fraudulent Cenvat credit. - Shri Naveen Agarwal (M/s. HSN Engineering): The unit was engaged in manufacturing wire, not the specified parts of automobile locksets. The Tribunal concluded that each appellant had distinct and independent roles in the fraudulent activities, making them liable for penalties irrespective of the main noticee's settlement. Majority Decision: The majority decision held that the appeals could not be allowed solely based on the immunity granted to the main noticee by the Settlement Commission. The penalties imposed on the appellants were to be examined on their merits, considering their individual roles in the fraudulent activities. The Tribunal directed that the appeals be listed for disposal on merits, as the legal issue of immunity had been resolved. Separate Judgments: - Member (Judicial): Supported the view that penalties on co-noticees should be set aside if the main noticee settled the case before the Settlement Commission. - Member (Technical): Held that the appellants were independently liable for penalties due to their distinct fraudulent activities and that immunity granted to the main noticee could not be extended to them. - Third Member (Technical): Resolved the difference of opinion by agreeing with the Member (Technical) that the appeals could not be allowed based on the immunity granted to the main noticee. Conclusion: The Tribunal concluded that the penalties imposed on the appellants were justified based on their individual roles in the fraudulent activities, and the appeals were to be examined on their merits. The case was listed for further proceedings to determine the penalties based on the merits of each appellant's involvement.
|
