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PJ/Case law/2014-15/2198

Whether penalty imposable on co-noticees when proceedings against main appellant concluded?

Case:- ARVIND KUMAR, D DHIMAN, MINAZ GADHIA Vs COMMISSIONER OF CENTRAL EXCISE, NASIK
 
Citation:- 2014-TIOL-397-CESTAT-MUM
 
Brief facts:- The facts of the case were that penalties, under Rule 26 of the Central Excise Rules, 2002, had been imposed on both the appellants by the adjudicating authority.
 
Appellant’s contentions:- The contention of the appellants was that the main party namely M/s. Shivsagar Steel Rolling Mills had already paid the duty, interest and 25% of the duty as penalty within 30 days of issuance of the show-cause notice therefore, as per the proviso to Section 11A of the Central Excise Act, 1944, the proceedings against the show-cause notice comes to end. Hence, the appellants submitted that the penalties imposed on both the appellants were not sustainable. To support this contention the appellants relied on the decision in the cases Tikam P. Bhojwani vs. CCE Ahmedabad – 2011 (272) ELT 88 (Tri) and CCE Raipur vs. Gopal Prasad Sultania - 2013 (293) ELT 271 (Tri.-Del.).
 
Respondent’s contentions:- The respondent reiterated the findings of lower authorities.
 
Reasoning of judgment:- Perused the case laws cited by the appellants wherein this tribunal held that if duty, interest and 25% of duty as penalty had been paid within 30 days of the issuance of show-cause notice, the proceedings against all the co-notices comes to an end. Therefore, imposing penalties on the appellant were not warranted. Accordingly, the impugned order was set aside quo imposing penalties on both the appellants.
 
Decision:- Appeal disposed off.
 
Comment:- The analogy drawn from the case is that as duty, interest and 25% of duty as penalty had been paid within 30 days of the issuance of show-cause notice by the main appellant and consequently the proceedings against main appellant concluded;  no penalty could be imposed on co-noticees.
 
Prepared by:- Ranu Dhoot

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