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2023 (5) TMI 858 - AT - Central ExciseLevy of penalty under Rule 209A of Central Excise Rules, 1944 read with Rule 26 of Central Excise Rules, 2002 - manipulating documents by showing purchases of waste paper in the name of suppliers when both the suppliers and transactions were not genuine - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT - On introduction of the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019, the main noticee, M/s. Bhikusa Papers Pvt. Ltd. and other co-noticees settled the dispute under SVLDRS, but the present appellant who is a director of the main noticee failed to opt under the scheme. However, without considering the directions given in the remand order and allowing cross examination, Commissioner has imposed penalties on the appellant, just for reason that the appellant did not settle the issue along with others under SVLDRS. Such approach of Commissioner cannot be justified. Even if the appellant has not approached under SVLDRS, Commissioner should have adjudicated as directed by Tribunal. No justification for imposition of penalty on reconsideration as per order of Tribunal is forthcoming. Thus, even after failure on the part of the appellant to avail the benefits of the scheme in its totality in view of Board Circular No. 1071/4/2019-CX.8 dated 27.08.2019 and the consistent decisions of this Tribunal, the penalty imposed on the appellant is set aside. Appeal allowed.
Issues:
1. Applicability of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) to co-noticees. 2. Imposition of penalty on a director for manipulating documents under Central Excise Rules. 3. Failure to opt for SVLDRS leading to penalty imposition. Issue 1: Applicability of SVLDRS to Co-noticees The Commissioner observed that when the main noticee and six co-noticees applied under SVLDRS, penalties were waived, but three co-noticees, including the director in question, did not apply. The Commissioner noted that the SVLDRS did not automatically extend benefits to co-noticees, necessitating adjudication for those who did not opt for the scheme. Issue 2: Imposition of Penalty for Document Manipulation The Commissioner found the director responsible for manipulating documents to claim full exemption under Notification No. 83/94. A penalty of Rs. 1,00,000 was initially imposed, but reduced to Rs. 20,000 due to missing the SVLDRS opportunity. The Commissioner upheld the penalty based on proven allegations of document manipulation. Issue 3: Failure to Opt for SVLDRS and Penalty Imposition The appellant, a director, argued ignorance of the main noticee's settlement under SVLDRS and lack of direct involvement in the alleged act. The Tribunal's remand order highlighted discrepancies in the case, emphasizing the need for proper examination and cross-examination. Despite the appellant's failure to opt for SVLDRS, the Commissioner's penalty imposition was deemed unjustified, as proper adjudication following the Tribunal's directions was not conducted. Judgment: The Tribunal allowed the appeal, setting aside the penalty imposed on the director. The decision was based on the failure to consider the Tribunal's directions and the lack of justification for the penalty after the appellant's non-participation in SVLDRS. The Tribunal emphasized the need for proper adjudication as directed, highlighting the importance of following legal procedures even in the absence of opting for settlement schemes. This detailed analysis of the judgment covers the issues raised, the Commissioner's observations, the appellant's arguments, and the Tribunal's decision, providing a comprehensive understanding of the legal aspects involved in the case.
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