2024 (5) TMI 1273 - AT - Central Excise

Penalty on other co-noticee u/r 8(3A) of Central Excise Rules, 2002 - whether after acceptance of application of the main applicant under SVLDRS, 2019 regarding the duty liability and penalty imposed, the personal penalty imposed on other noticees would survive? - HELD THAT - This issue has been dealt by the Tribunal in the case of M/S JPFL FILMS PRIVATE LIMITED, JALAN JEE POLYTEX LTD., KAVITA INTERNATIONAL AGENCY, KULDEEP SINGH, DP SINGH, R KNITFAB, PERFECT DESIGNER, VK KALRA, RELIANCE INDUSTRIES LIMITED, KANPUR WOOL INDUSTRIES, SWASTIK TRADING CO., APEX CORPORATION AND MANSA TRADERS VERSUS COMMISSIONER OF CENTRAL EXCISE, LUDHIANA 2023 (12) TMI 304 - CESTAT CHANDIGARH where it was held that ' the benefit of the Scheme cannot be denied to the appellants just because they did not file the declaration under SVLDR Scheme.' There are no reason not to follow the aforesaid precedent of this Tribunal - appeal allowed.

Summary

Issues involved: Appeal against Order-in-Original regarding duty discharge and penalty imposition under Rule 8(3A) of Central Excise Rules, 2002.

Summary:
The appeals were filed against an Order-in-Original passed by the Commissioner of Central Excise and Customs, Belgaum, alleging failure to discharge duty within the due date as per Rule 8(3A) of Central Excise Rules, 2002. The main noticee paid the duty and interest without utilizing cenvat credit, resulting in confirmation of demand and imposition of personal penalties on the appellants. One of the appellants settled under the SVLDRS, 2019, leading to a dismissal of their appeal. The main issue was whether penalties on other noticees would survive after the main applicant's settlement under the SVLDRS, 2019. The Tribunal analyzed relevant provisions and held that the relief under the Scheme is available without the need for a committee's satisfaction, especially for penalties. Failure to file declarations under the Scheme should not deny appellants the benefit, and penalties imposed on them were waived, leading to the allowance of all appeals.

The Tribunal's decision was based on the interpretation of Section 124 of the Scheme, which provides relief for penalties or late fees without requiring committee approval. Procedural issues like failing to file declarations should not hinder substantial rights, as seen in previous Tribunal cases. The Tribunal emphasized that benefits under the Scheme should not be denied to appellants for not filing declarations, especially when only penalties are involved. The impugned order was not sustained on merits regarding penalty imposition, leading to the allowance of all appeals. The decision was subsequently followed by other Benches of the Tribunal, affirming the appellants' right to relief under the Scheme.

(Order pronounced in Open Court on 22.05.2024)