2022 (11) TMI 1350 - AT - Central Excise

Levy of penalty on appellant u/r 26 of CER - Failure to do provisional assessment or to pay the interest accruing on the differential duty paid after price revision - liability of appellant as a General Manager - dispute under Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 already settled - HELD THAT - On perusal of the Order-in-Original it is noticed that negligence in general is attributed to the conduct of the present Appellant for holding a responsible position of General Manager in M/s. Crompton Greaves Ltd. and it was stated that he had not taken corrective actions to opt for provisional assessment or to pay the interest accruing on the differential duty paid after price revision and such frequent instances clearly reflect failure of duty on the part of the General Manager namely the Appellant. This being the allegations and having regard to the fact that had the present Appellant preferred to have filed a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019, he would have paid nil penalty in view of the relief available to him under Section 124(i)(b) of the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules 2019, we are of the considered view that even after failure on the part of the Appellant to avail the benefits of the scheme, no specific allegation against the Appellant has been substantiated so as to confirm penalty of Rupees Ten lakhs imposed on him. The order passed by the Commissioner of Central Excise, Mumbai-III to the extent of imposing penalty of Rs.10 lakhs on the Appellant Vishwanath Narayan under Rule, 26 of the Central Excise Rules, 2002 is hereby set aside - Appeal allowed.

Summary

Issues involved:
Settlement under Sabka Vishwas Scheme Rules, 2019, imposition of penalty on the General Manager, applicability of penalty post-settlement.

Analysis:

1. Settlement under Sabka Vishwas Scheme Rules, 2019:
The main Appellant had settled the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019, obtaining Form No. SVLDRS-4 with nil tax liability. The Tribunal dismissed the appeal as deemed withdrawn after settlement. The present Appellant, the General Manager, argued that the allegation against him was general and without direct involvement in the act. The Appellant contended that no further penalty could be imposed post-settlement under the scheme.

2. Imposition of penalty on the General Manager:
The Order-in-Original attributed negligence to the present Appellant for not taking corrective actions in his role as the General Manager. The Commissioner stated that the Appellant failed in duties related to provisional assessment and interest payment on differential duty. Despite these allegations, the Appellant argued that no specific wrongdoing was substantiated to confirm the penalty of Rs. 10 lakhs imposed on him.

3. Applicability of penalty post-settlement:
The Respondent's Authorized Representative reiterated the Commissioner's findings but left the decision to the Bench considering the settlement under the Sabka Vishwas Scheme Rules, 2019. The Tribunal noted that had the Appellant availed the scheme's benefits by filing a declaration, he would have paid nil penalty. The Tribunal concluded that no specific allegation against the Appellant was proven post-settlement, leading to the setting aside of the penalty imposed on the Appellant.

In conclusion, the appeal was allowed, and the penalty of Rs. 10 lakhs imposed on the Appellant was set aside by the Tribunal. The judgment highlighted the importance of settlement under the Sabka Vishwas Scheme Rules, 2019, and the limitations on imposing penalties post-settlement, especially when no specific allegations are substantiated.