2001 (3) TMI 183 - AT - Central Excise

Summary

Issues involved: Confirmation of duty under Section 11A of the Central Excise Act, 1944, imposition of penalties under Central Excise Rules, 1944, applicability of Kar Vivad Samadhan Scheme, 1998 on co-noticees.

Confirmation of Duty and Penalties: The Addl. Commissioner of Central Excise confirmed duty and imposed penalties on M/s. Om Metals & Minerals (P) Ltd. under Section 11A of the Central Excise Act, 1944 and Rule 9(2) of the Central Excise Rules, 1944. Additionally, penalties were imposed on the Managing Director and Technical Director of the company under Rule 209A of Central Excise Rules, 1944.

Appeals and Dismissal: Appeals filed by the Directors against the Commissioner's order were dismissed, leading to second stage appeals. The appellants argued that the matter was settled under the Kar Vivad Samadhan Scheme, 1998 by the principal noticee, thus immunity from penalties should apply to co-noticees as well.

Legal Position and Precedents: The Tribunal referred to previous decisions where settlements under the Kar Vivad Samadhan Scheme led to penalties against co-noticees becoming infructuous. It was established that when the principal noticee settles under the Scheme, penalties on co-noticees do not survive, as seen in the case of C.C.E. Mumbai-III v. Shri Bhai Chand U. Doshi & Ors.

Decision and Dismissal of Appeals: Based on legal precedents, the Tribunal held that since the principal noticee's matter was settled under the Kar Vivad Samadhan Scheme, penalties on the appellants were no longer valid. Therefore, the appeals were deemed infructuous and subsequently dismissed.