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2011 (10) TMI 554 - HC - Central ExciseDemand and penalty - part of the duty during the course of investigation and paid the balance amount of duty and 25% of total duty amount of proposed demand as penalty within the time limit specified under proviso to Section 11A(2) - Held that:- During the adjudication proceedings, the firm deposited the amount claimed and that the Additional Commissioner returned a finding that the proceedings against the firm stands concluded under proviso to sub-section (2) of Section 11A of the Central Excise Act, 1944 but imposed a penalty of ₹ 2 lacs each individually and separately on the partners of the firm. The said order was set aside by the Commissioner (Appeals) on 20-3-2009. It was held that the Rule 26 of the Rules is a penal provision and not the one under which show cause notice can be issued. Since the show cause notice under Section 11A(1) of the Act had been issued and proceedings stand concluded against firm, therefore, penalty proceedings under Rule 26 of the Rules cannot be continued against partners. The said order was affirmed in appeal by the Tribunal as well vide order dated 5-1-2011. Once the proceedings against the firm stand concluded, penalty proceedings against partners of the firm cannot continue as Rule 26 of the Rules is not an independent provision but has to be read with Section 11A of the Act. The firm has satisfied the due of the Revenue, therefore, the imposition of penalty under Rule 26 of the Rules are not justified. - Decided against Revenue.
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