2017 (9) TMI 548 - AT - Central Excise

Penalty u/r 26 of the CEA, 2002 in the capacity of Authorized Signatory of main noticee - case of appellant is that once the appellant has paid the entire Central Excise duty along with interest and 25% penalty of the said duty within 30 days receipt of the SCN, under proviso to sub Section 2 of Section 11A of the CEA, all proceedings stand concluded - Held that - The case of the appellant is squarely covered by the decision of Hon ble High Court of Punjab & Haryana in the case of COMMISSIONER OF C. EX., CHANDIGARH-I Versus VIKAS GARG 2011 (10) TMI 554 - Punjab and Haryana High Court , where it was held that Once the proceedings against the firm stand concluded, penalty proceedings against partners of the firm cannot continue as Rule 26 of the Rules is not an independent provision but has to be read with Section 11A of the Act - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Imposition of Central Excise duty, interest, penalty, and redemption fine by the original adjudicating Authority.
2. Appeal against the penalty imposed on the Authorized Signatory of the main noticee.
3. Denial of benefit under the proviso to sub Section 2 of Section 11A of the Central Excise Act.

Analysis:
1. The original adjudicating Authority confirmed the demand of Central Excise duty, interest, and penalties, including a redemption fine and penalties on individuals and entities involved. The Authority invoked the extended period clause of limitation and ordered the appropriation of the duty amount already paid. The penalties were imposed under various sections of the Central Excise Act, 1944, and the Central Excise Rules, 2002. The main noticee had paid the entire duty, interest, and 25% penalty within 30 days of receiving the show-cause notice.

2. The appeal focused on the penalty imposed on the Authorized Signatory of the main noticee and the denial of benefit under the proviso to sub Section 2 of Section 11A of the Central Excise Act. The argument presented was that once the duty, interest, and a portion of the penalty were paid within the stipulated time frame, all proceedings should have concluded as per the proviso. The appellant relied on legal precedents, including decisions from the Hon'ble High Court of Punjab & Haryana and the Tribunal, to support their case.

3. The Member (Technical) analyzed the submissions and noted that the appellant, as the Authorized Signatory of the main noticee, had settled the proceedings by paying the required amounts within the specified period. Referring to the decision of the Hon'ble High Court of Punjab & Haryana in a similar case, it was concluded that once the proceedings against the firm were resolved, penalty proceedings against individuals associated with the firm could not continue. The Member found that the appellant's case aligned with the legal interpretation provided in the cited case law, leading to the allowance of the appeal.

Overall, the judgment allowed the appeal based on the legal principles and precedents cited, emphasizing the conclusion of proceedings upon the fulfillment of payment obligations within the specified timeframe as per the relevant provisions of the Central Excise Act.