2010 (4) TMI 85 - HC - Central Excise

Levy of penalty against the persons who were not to the parties to the case held that - The petitioners were not parties before the Tribunal when the order of remand was passed by the Tribunal. They were neither made parties by the exporters nor by the revenue and there was no question of the petitioners having filed any appeal because they had already been exonerated by the Commissioner of Central Excise (Adjudication). Therefore, the order passed by the Tribunal, whereby the matter was remanded for de novo consideration, could not, in any event, affect the petitioners in any way.

Summary

Issues:
1. Quashing of orders-in-original dated 18.12.2009 and 29.12.2009
2. Seeking direction restraining respondents from coercive action
3. Allegations against officials in show cause notices
4. Exoneration of officials in previous orders-in-original
5. Appeal filed by exporters and revenue before Tribunal
6. Imposition of penalties in fresh orders-in-original
7. Lack of party status for officials in Tribunal's remand order
8. Acceptance of earlier orders-in-original by the department
9. Legality of penalties imposed on officials
10. Setting aside of impugned orders-in-original

Analysis:
The judgment addressed multiple issues arising from writ petitions seeking the quashing of orders-in-original dated 18.12.2009 and 29.12.2009, along with a direction to restrain the respondents from taking coercive action. The petitioners, officers of the Central Excise and Customs Departments, were alleged to be involved with specific exporters. Despite show cause notices and subsequent adjudication by the Commissioner, the officials were exonerated with no penalties imposed in the initial orders-in-original of 2006. However, after appeals by exporters and the revenue, fresh orders-in-original in 2009 imposed penalties on the officials, leading to the main contention.

The Court emphasized that the Tribunal's remand order did not involve the petitioners as they were not parties before the Tribunal. The officials had already been cleared in the initial adjudication, and the department had chosen not to appeal those decisions. Therefore, the imposition of penalties in the fresh orders-in-original was deemed unjustified as the petitioners were not subject to the Tribunal's remand for reconsideration. The Court held that the penalties imposed on the petitioners were invalid due to their lack of involvement in the Tribunal proceedings and the prior acceptance of their exoneration by the department.

Consequently, the impugned orders-in-original dated 18.12.2009 and 29.12.2009 were set aside in relation to the petitioners, granting relief in their favor. The Court highlighted the petitioners' lack of party status in the Tribunal proceedings, the department's acceptance of their exoneration, and the absence of grounds for imposing penalties in the fresh orders-in-original. The judgment concluded by allowing the writ petitions, with each party bearing their respective costs, thereby disposing of the matter effectively.