2024 (10) TMI 619 - AT - Central Excise

Levy of penalty imposed on co-noticee - main appellant has opted for settling the issue under SVLDRS - HELD THAT - As held by this Tribunal in similar cases appeal filed by the appellant challenging the personal penalty arising within the same Order-in-Original is unsustainable. Reliance can be placed in SHRI S. BHARATH REDDY, MANAGING DIRECTOR, M/S. BRITISH NUTRITIONS PRIVATE LIMITED SHRI V.S. REDDY, EXECUTIVE DIRECTOR, M/S. BRITISH NUTRITIONS PRIVATE LIMITED, VERSUS COMMISSIONER OF CENTRAL EXCISE, BANGALORE 2024 (6) TMI 1394 - CESTAT BANGALORE where it was held that 'once the main appeal is settled under SVLDRS, 2019, the appeals filed by the co-noticees challenging the personal penalty arising out of the same Orderin-Original cannot be sustained.' The appeal filed by the appellant is allowed.

Summary

Issues:
1. Penalty imposition on co-noticee when main appellant opts for SVLDRS settlement.

Analysis:

The judgment by the Appellate Tribunal CESTAT Bangalore, delivered by Hon'ble Mr. P. A. Augustian, Member (Judicial), addressed the issue of whether a penalty imposed on a co-noticee can be sustained when the main appellant opts for settling the issue under the Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS). The case involved the appellant, the Managing Partner of M/s. Mecon Industries, who was alleged to have manufactured and cleared fabricated goods without payment of duty. The Adjudication Authority confirmed the demand and imposed a penalty on the appellant.

During the appeal hearing, the appellant's counsel presented that the main appellant had sought settlement under SVLDRS and provided documentation to support this claim. Although the issue against the main noticee was settled, technical issues, such as non-payment of the balance amount by the main appellant, led to the dismissal of the present appellant's petition. The appellant's counsel cited precedents, including the Tribunal's decision in the matter of Shri S. Bharat Reddy, MD, M/s. British Nutritions Pvt. Ltd., to argue that proceedings against the co-noticee cannot proceed when the penalty imposed on the co-noticee is under challenge before the Tribunal.

The Tribunal, in its decision, referred to previous cases and held that when the main appeal is settled under SVLDRS, appeals challenging personal penalties arising from the same Order-in-Original cannot be sustained. The Tribunal emphasized that once the main appeal is resolved under SVLDRS, the appeals by co-noticees contesting personal penalties from the same order cannot stand. The Authorized Representative for the Revenue acknowledged the liberal view taken by various Tribunals, including the present Tribunal, on this matter.

After hearing both sides and reviewing the records, the Tribunal concluded that appeals challenging personal penalties within the same Order-in-Original are unsustainable when the main appeal is settled under SVLDRS. Consequently, the appeal filed by the appellant was allowed. The judgment was dictated and pronounced in open court on 23rd September 2024.