2014 (4) TMI 874 - AT - Central Excise

Waiver of pre-deposit - Penalty under the provisions of Rule 26 of the Central Excise Rules, 2002 - Held that - main noticee M/s. Banco Ltd. had settled the issue by paying the duty liability and the interest thereof before the issuance of show cause notice and the excise authorities have accepted such settlement and the adjudicating authority has given the benefit of provisions of Section 11A(2B) of the Central Excise Act, 1944 for non imposition of penalty on the main noticee - proceedings against the main noticee being concluded, and the show cause notice being common to all noticees, the co-noticee need not be charged with any penalty under provisions of Rule 26 of the Central Excise Rules, 2002. I find that the appellant has made out a prima facie case for the waiver of the pre-deposit of the amounts involved. Accordingly, application for the waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of appeal - Following decision of the case Tikam P. Bhojwani 2011 (3) TMI 893 - CESTAT, AHEMDABAD - Stay granted.

Summary

Issues:
Waiver of pre-deposit of penalty under Rule 26 of the Central Excise Rules, 2002.

Analysis:
The judgment pertains to a stay petition filed for the waiver of pre-deposit of a penalty amounting to Rs.5 lacs imposed on the appellant under Rule 26 of the Central Excise Rules, 2002. Upon hearing both sides and examining the records, it was noted that the main noticee had settled the issue by paying the duty liability and interest before the show cause notice was issued. The excise authorities accepted this settlement and refrained from imposing a penalty on the main noticee under Section 11A(2B) of the Central Excise Act, 1944. Referring to a previous Tribunal decision in the case of Tikam P. Bhojwani, it was established that when proceedings against the main noticee are concluded and the show cause notice is common to all noticees, co-noticees should not be penalized under Rule 26 of the Central Excise Rules, 2002. Consequently, the appellant was deemed to have established a prima facie case for the waiver of the pre-deposit of the penalty amount. As a result, the application for the waiver of pre-deposit was granted, and the recovery of the penalty amount was stayed pending the disposal of the appeal.

This judgment underscores the importance of examining the specific circumstances of each case when determining the applicability of penalties under the Central Excise Rules. It highlights the significance of settlements made by main noticees before the issuance of show cause notices and how such actions can impact the liability of co-noticees. The reference to the precedent set by the Tribunal in the case of Tikam P. Bhojwani serves as a guiding principle for similar situations where co-noticees seek relief from penalties under Rule 26. The decision showcases the Tribunal's commitment to ensuring fair treatment and upholding the principles of natural justice in adjudicating matters related to excise duties and penalties.