2018 (2) TMI 551 - AT - Central Excise

Penalty levy on the firm as well as on its partner - Held that - The duty demand along with interest was paid before issuing the show cause notice. When it is so, then penalty is not leviable as per the ratio laid down in the following cases . See Union of India v. Rajasthan Spinning and Weaving Mills 2009 (5) TMI 15 - SUPREME COURT OF INDIA and Commissioner of Central Excise v. Rashtriya Ispat Nigam Ltd. 2003 (5) TMI 509 - SUPREME COURT . We set aside the impugned order and cancel the levy of penalty. Accordingly, impugned order is modified to this extent. Remaining order is sustained.

Summary

Issues:
Appeal against penalty levy on firm and partner.

Analysis:
The appeal was filed against Order-in-Appeal No: IPL/183 & 184/NSK/2008 dated 06/10/2008. The appellant, through their advocate, acknowledged the duty demand but contested the penalty levy on the firm and its partner. It was agreed by both parties that the duty demand along with interest had been paid before the show cause notice was issued. Citing various legal precedents such as Union of India v. Rajasthan Spinning and Weaving Mills, Commissioner of Central Excise v. Rashtriya Ispat Nigam Ltd., Commissioner of Central Excise v. Galurav Mercantile Ltd., Commissioner of Central Excise v. Matsyodari Steel & Alloys (P) Ltd., and Commissioner of Central Excise Rohtak v. SB Packaging Ltd., it was argued that when duty demand and interest are paid before the show cause notice, penalty is not leviable. The Tribunal, following the precedent set by the mentioned cases, set aside the impugned order and canceled the penalty levy, modifying the order accordingly. The rest of the order was upheld, and both appeals by the appellants were partly allowed. The decision was dictated and pronounced in the open court.