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2024 (1) TMI 388 - AT - Central ExciseLevy of penalty - Nil rate of duty decided under Settlement of disputes under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT - When demand is settled under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 imposition of penalty under Rule 26 on the Co-Appellant would fail for the reason that the said Proviso Section 124(i)(b) of the Finance Act, 1994 that deals with Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and subsequent clarificatory circular issued vide Circular No. 1071/4/2019- CX.8 dated 27.08.2019 as well as consistent decision of this Tribunal, penalty would have been settled at Nil on the Appellant, had he filed an application under the scheme and availed of its opportunity. In respect of the merit of the appeal also we have perused the order passed by the Commissioner (Appeals) and noticed that allegation of violation of provisions of Central Excise Act is made in general without specific reference to the actual conscious knowledge of the Appellant that the goods so purchased by them were liable for confiscation so as to attract penalty under Rule 26 of the Central Excise Rules, 2002. Thus, on merit as well as under the dispute resolution scheme penalty would not survive against the present Appellant M/s Protochem Industries Pvt. Ltd. and accordingly the same is set aside - appeal allowed.
Issues involved:
The issues involved in the judgment are settlement under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, dismissal of appeals deemed withdrawn under Section 127(6) of the amended Finance Act, 1994, imposition of penalty under Rule 26 on the Co-Appellant, and legality of penalty confirmed against the present Appellant without proper establishment of conscious knowledge. Settlement under Sabka Vishwas Scheme: Three appellants settled their disputes under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and received SVLDRS Form-4 indicating NIL duty liability. The appeals filed by these three appellants were dismissed as deemed withdrawn under Section 127(6) of the amended Finance Act, 1994. Imposition of Penalty and Legality: For the remaining appellant, it was argued that had the appellant applied under the scheme, no penalty would have survived against them. The argument was also based on the legality of penalty confirmed without proper establishment of conscious knowledge about the clearance of goods without payment of duty. The Tribunal found that when demand is settled under the scheme, imposition of penalty would fail as per the provisions of the Finance Act, 1994 and subsequent clarificatory circulars. Decision and Rationale: The Tribunal considered the settlement under the Sabka Vishwas Scheme and the merit of the appeal. It was noted that the allegation of violation of provisions was made in general without specific reference to the actual conscious knowledge of the appellant. The Tribunal concluded that penalty would not survive against the present appellant and set aside the order of penalty imposed by the Commissioner (Appeals) on the appellant. Final Order: The appeals of three appellants settled under the Sabka Vishwas Scheme were dismissed as deemed withdrawn, and the appeal of the remaining appellant was allowed, setting aside the penalty imposed by the Commissioner (Appeals). Separate Judgement: No separate judgment was delivered by the judges in this case.
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