2013 (6) TMI 582 - AT - Central Excise

Personal penalty - stay - penalty on partners - Held that - Following the decision in CCE vs. Jai Prakash Motwani 2009 (1) TMI 501 - GUJARAT HIGH COURT , since penalty penalty was imposed on the firm, no penalty can be imposed on partners - stay granted. So far as imposition of penalties upon the authorized signatories and transporter are concerned, it is observed that Commissioner (A) has given elaborate reasons for imposing penalties upon these appellants. Both the authorized signatories and transporter were aware of the clandestine activity being undertaken - An amount of 50% of penalty directed to be pre-deposited.

Summary

Issues: Appeals against penalties imposed by Commissioner (A) on partners of a firm, authorized signatories, and a transporter for involvement in clandestine activities.

Analysis:
- The appeals were filed against the penalties imposed by the Commissioner (A) on the appellants, including a partner of a firm, authorized signatories, and a transporter, for their involvement in clandestine activities.
- The appellant argued that since the penalties imposed on the firm had already been paid, no further penalties should be imposed on the partner, citing a decision of the Hon'ble High Court of Gujarat. The appellant requested a complete stay on penalties for all appellants.
- The Authorized Representative argued that the penalties imposed by the Commissioner (A) had already been reduced, and the roles of the appellants were clearly defined in the order.
- The Tribunal referred to a previous case and observed that when a penalty is imposed on a partnership firm, no separate penalty can be imposed on any of its partners. Based on this, the penalty imposed on the partner was set aside, and a stay on recovery of the penalty was granted until the appeal was disposed of.
- However, regarding penalties imposed on the authorized signatories and the transporter, the Commissioner (A) provided detailed reasons for imposing penalties, indicating their awareness of the clandestine activities. Therefore, these appellants were directed to pay 50% of the penalties within eight weeks and report compliance. A stay was granted on the remaining penalties upon payment of the pre-deposits.

This judgment highlights the different treatment of penalties for partners of a firm versus authorized signatories and a transporter in cases of clandestine activities. The legal arguments and precedents cited played a crucial role in determining the penalties imposed and the conditions for granting a stay on recovery.