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TMI Blog2014 (5) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner had decided that the machineries were not so used and this Tribunal vide order No.1340 to 1344/2001 dt. 20/07/2011 had taken a view that Department had not made out a case against the appellants and set aside the entire order demanding duty, imposing redemption fine and penalties against the appellant and other parties to the dispute. Matter was carried before the Hon'ble High Court of Karnataka. Hon'ble High Court vide their order dt. 01/03/2012 in Tax referred case Nos.17-21 of 2004(Tax) remanded the matter to the Commissioner for fresh adjudication directing the Commissioner to hear the assessees and pass appropriate orders in respect of redemption fine imposed on machineries, raw materials and spare parts and also whether the assessees are personally liable to pay fine. The Commissioner in the impugned order has considered the quantum of redemption fine and has reduced the same from Rs.25 lakhs originally imposed to Rs.12 lakhs after giving the depreciation for the use of the machineries and also has taken a view that since it is nearly 20 years since the machines were imported, it would not be possible to arrive at the market value. 3. Chiramith is contesting the redemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal memorandum, it has also been stated that the adjudicating authority did not implement the directions of the Hon'ble High Court and the order without reconsidering the penalty, cannot be said to mean that the original order gets restored and therefore the penalty cannot be required to be paid by the appellants. The learned AR submits that the Hon'ble High Court clearly observed in their order that the order of the Commissioner passed in 1999 is restored except in relation to redemption fine and personal penalties imposed on the appellants. Since the Commissioner has already clearly discussed and held that penalty imposed on juristic persons cannot be considered as personal penalty, it cannot be said that he has not implemented or obeyed the directions of the Hon'ble High Court. Therefore the Department has not made any mistake in enforcing the demand for personal penalties imposed as per the order dt. 10/12/1999 and the appellants should have mentioned Order-in-Original as the order under challenge and not the letter of the Superintendent. 6. I have considered the submissions. In my opinion, there was an omission on the part of the Registry also. After noticing that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use etc., I find that the appellant has, no doubt, a case for reduction in redemption fine to some extent. In my opinion, reduction of redemption fine to the extent of about 25% of the duty would be appropriate and accordingly the redemption fine imposed is reduced to Rs.7 lakhs (Rupees seven lakhs only). 8. The next issue is whether the Commissioner is right in taking a view that there is no need for him to reconsider the issue of penalties imposed on the appellants on the ground that all the three appellants are juristic persons and Hon'ble High Court had directed to reconsider only personal penalty and therefore he was not required to consider the issue of penalty at all on the three appellants. 9. During the course of verification of records and hearing of both sides and ongoing through the order of the Tribunal passed on the earlier occasion, it was found that Chirag is a proprietary firm and Mrs. Jyothi Ramachandra was the proprietor. In the case of a proprietary firm, it is settled law that there cannot be separate penalty or demand for duty on the firm and the proprietor. That being the legal position at least in the case of Chirag, the observation of the Commissioner tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese submissions which are recorded by the Hon'ble High Court have to be taken note of for the purpose of deciding the issue. What emerges from the observations of the Hon'ble High Court while recording the submissions is that the Hon'ble High Court has used the word 'counsel for the assessee' not only while noting down the submissions but also while recording their final conclusion before the order portion of the order. There is no dispute that the appeal filed by the Revenue was against 5 respondents. Therefore the observation of the Hon'ble High court while discussing the issue and using the word 'assessee' has to be taken and considered as meaning 'respondents'. Otherwise in this case the assessee is only Chiramith who had imported the goods which were the subject matter of dispute. If that is the case, the whole decision would have been taken as relating to only Chiramith, which, in my opinion, would not be proper since there is no finding or observation that there were different counsels for the parties and all the respondents were represented by a single counsel and there is no conflict of interest between the appellants also. In these circumstances, the only conclusion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the conclusion that I have reached earlier that the words learned counsel for the assessee used by the Hon'ble High Court has to be taken as the words learned counsel for the respondents since there were 5 respondents in this case. Therefore in my opinion Para 28 has to be taken to mean that the penalties imposed on all the appellants were required to be reconsidered. Therefore, in my opinion, the matter is to be remanded to the original adjudicating authority with a direction to redetermine the personal penalty on the appellants. 13. At this stage the learned counsel also submitted that there was no proposal to impose penalty on Chirag and Tavadec in the show-cause notice. The learned AR counters this by saying that this issue was never raised either before the Commissioner or before the Hon'ble High Court. It is submitted that the above plea was not raised even before the original adjudicating authority at the first instance and she also submits that Chirag and Tavadec have submitted their replies to the show-cause notice which itself would show that they themselves had felt that they are liable to penalty and it was an issue before the original adjudicating au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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