2024 (5) TMI 412 - AT - Central Excise

Penalty u/r 26(1) of Central Excise Rules, 2002 - charge of abating the evasion of duty by M/s. Phenix Construction Technologies - The appellant argued that the case of the main party involved in the duty evasion had been settled under the SVLDRS - HELD THAT - The appellant has been penalized under Rule 26 (1) in connection with the duty evasion made by M/s. Phenix Construction Technologies and the case of M/s. Phenix Construction Technologies has been settled under SVLDRS-2019 and the appeal was disposed of by this Tribunal vide order dated 10.06.2021, hence, the personal penalty of the appellant is not sustainable in the light of various judgements. Reliance can be placed in SHRI V.K. AGGARWAL AND SHRI J.K. AGGARWAL VERSUS COMMISSIONER OF CENTRAL TAX, CGST AND CENTRAL EXCISE, NEW DELHI 2023 (9) TMI 178 - CESTAT NEW DELHI and M/S. SIEMENS LTD. (FORMERLY KNOWN AS M/S. MORGAN CONSTRUCTION CO. PVT. LTD.) , MR. SUNIL CHELLANI VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III 2023 (5) TMI 377 - CESTAT MUMBAI where it is settled that once the main case of duty evasion is settled under SVLDRS, 2019, the penalty on the Co- Noticee/appellant shall not survive. The penalty is set aside. The Appeal is allowed.

Summary

Issues involved: Challenge to personal penalty imposed under Rule 26(1) of Central Excise Rules, 2002 for abating duty evasion by M/s. Phenix Construction Technologies.

Summary:

Issue 1: Personal Penalty Imposed under Rule 26(1)
The appellant challenged the personal penalty imposed under Rule 26(1) of Central Excise Rules, 2002 for abating duty evasion by M/s. Phenix Construction Technologies. The appellant's representative argued that the main party's case had been settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and the Tribunal had already disposed of the appeal in light of this settlement. It was contended that the appellant had not played any role in the duty evasion by M/s. Phenix Construction Technologies.

Issue 2: Consideration of Submissions
Both sides' submissions were carefully considered, and it was noted that the appellant was penalized in connection with duty evasion by M/s. Phenix Construction Technologies. However, since the case of M/s. Phenix Construction Technologies had been settled under SVLDRS-2019, and the Tribunal had already disposed of the appeal related to that case, the personal penalty on the appellant was deemed unsustainable. The Tribunal referred to various judgments, including Shri V.K. Aggarwal and Shri J.K. Aggarwal v. CCE, New Delhi, to support the decision that once the main case of duty evasion is settled under SVLDRS-2019, the penalty on the Co-Noticee/appellant should not stand.

Decision:
In light of the above judgments and the settlement of the main case under SVLDRS-2019, the penalty imposed on the appellant was set aside, and the appeal was allowed. The decision was pronounced in the open court on 08.05.2024.