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TMI Blog2015 (10) TMI 2350X X X X Extracts X X X X X X X X Extracts X X X X ..... ling Mills case is more agreeable to me. The Tribunal in that case, has not only considered that when the proceedings against the manufacturer/assessee stand concluded on payment of disputed amount of duty plus interest and 25% of the duty as penalty, there would be no sense in continuing the proceedings for imposition of penalty under Rule 26 against other persons like traders who had purchased the goods, transporters who had transported the goods cleared by manufacturer/assessee, the directors/employees of the manufacturer/assessee company. The Tribunal has discussed the category of persons that would fall into the group 'other persons'. Further the Board's Circular No. 831/08/06-EX dated 26.7.2006 has also been considered. I concur with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that he is confining his arguments with regard to imposition of penalty. The primary adjudicating authority imposed penalty of ₹ 1,50,000/- on M/s.Babaji Udyog, ₹ 1,00,000/- on Shri Santosh Aggarwal, and penalty of ₹ 1,50,000/- was imposed on Shri Inder Aggarwal. The learned Counsel submitted that the main notice in the proceedings viz. M/s.SLH International had already deposited duty demand alongwith interest and 25% penalty before issuance of the show cause notice and that therefore as per proviso to sub clause (2) of section 11A of Central Excise Act, 1944, the proceedings against the appellants, who are co-noticees have also been concluded. That therefore, no penalty can be imposed on the co-noticees. It was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11A is reproduced below: (2) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom noticee is served under sub-section (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined: Provided that if such person has paid the duty in full together with, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice are served under sub-section (1) shall, without prejudice to the provisions of Sections 9, 9A and 9AA, be deemed to be conclusive as to the matter stated therein: Provided further that, if su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved under sub-section (1). 8. As is seen from the above, the invocation of penal provision of Rule 26 is dependent upon so many factors which are unconnected with the provisions of Section 11A. No doubt a combined show cause noticee under Section 11A demanding short-paid or non-paid dues along with proposal to imposition of penalties under Rule 26 is issued but as already discussed, the two proposals are independent of each other and mutually exclusive. Rule 26 which provides for imposition of penalty in certain circumstances cannot be said to be a part of the proviso to sub-section (2) of Section 11A so as to conclude the proceedings in respect of all noticees on payment of duty, interest and part penalty by main manufacturer. The sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y separate notices issued in this regard. This interpretation would make sense, as when the proceedings against the manufacturer/assessee stand concluded on payment of disputed amount of duty plus interest plus 25% of the duty as penalty, there would be no sense in continuing the proceedings for imposition of penalty under Rule 26 against other persons like traders who had purchased the goods, transporters who had transported the goods cleared by manufacturer/assessee, the Directors/employees of the manufacturer/assessee company. 6.3 The intention of sub-section (1A) read with sub-section (2) of Section 11A, as is evident from Board's Circular No. 831/08/06-EX, dated 26-7-2006, is to give opportunity to manufacturer/assessee to settl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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