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2025 (3) TMI 119 - AT - Central ExciseLevy of penalty u/r 26 of Central Excise Rules 2002 - illicit removal of LLDPE and HDPE without payment of duty - appellant abetted M/s. Vraj Packaging whose case has been settled under SVLDRS-2019 - HELD THAT - When the demand in the case of main appellant M/s. Vraj packaging Pvt. Limited has been settled under SVLDRS-2019 vide order No. A/11013/2021 dated 10.03.2021 the case of co-noticee for penalty will not sustain. The same view has been taken by this Tribunal in the case of M/s. Siemens Limited 2023 (5) TMI 377 - CESTAT MUMBAI that penalty on the co-noticee will not sustain when the main party s case of confirmed demand is settled under SVLDRS-2019. Therefore following the above precedent the penalty imposed upon the appellant in this case is not sustainable. The impugned order-in-appeal set aside - appeal allowed.
The appeal before the Appellate Tribunal CESTAT Ahmedabad was directed against an order-in-original passed by the Commissioner (Appeals), CGST & Central Excise, Commissionerate Surat, upholding an order-in-original passed by the Additional Commissioner, Central Excise & Service Tax, Vapi, which imposed a penalty on the appellant for illicit removal of LLDPE and HDPE without payment of duty. The case involved the appellant, M/s. Vraj Packaging, and other parties engaged in the unauthorized removal and sale of goods without proper documentation.**Issues Presented and Considered:**1. Whether the penalty imposed on the appellant under Rule 26(1) of the Central Excise Rules, 2002 is justified.2. Whether the settlement of the main party's case under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 affects the penalty on the co-noticee.**Issue-Wise Detailed Analysis:**- The relevant legal framework was Rule 26(1) of the Central Excise Rules, 2002, which provides for penalties for violations.- The Court considered the evidence of unauthorized removal of goods, involvement of the appellant in arranging transportation, and admissions by involved parties.- The Court interpreted that the penalty imposed on the appellant was not sustainable in light of the settlement of the main party's case under the SVLDRS-2019.- Key evidence included statements by involved parties, transporters confirming deliveries, and correlation between requisition slips and records.- The Court applied the law to the facts by considering the impact of the settlement on the co-noticee's penalty.- Competing arguments were presented by the appellant's counsel seeking a waiver of the penalty and the department arguing for the penalty's imposition.- The Court concluded that the penalty imposed on the appellant was not sustainable due to the settlement of the main party's case and allowed the appeal.**Significant Holdings:**- The Court cited precedents and established that when the demand in the main party's case is settled under SVLDRS-2019, the penalty on the co-noticee may not be sustainable.- The final determination was to set aside the impugned order-in-appeal and allow the appellant's appeal.In summary, the Appellate Tribunal held that the penalty imposed on the appellant for involvement in the unauthorized removal of goods was not sustainable due to the settlement of the main party's case under the SVLDRS-2019. The Tribunal allowed the appeal, emphasizing the impact of settlement on penalties for co-noticees.
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