2016 (1) TMI 438 - AT - Central Excise

Levy of personal penalty on co-noticees for abetting clandestine removal - revenue contended that adjudicating authority erred in not imposing penalties. - allegation of clandestine removal agianst the main noticee was confirmed - Held that - 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. impugned order is correct and legal and does not require any interference, in the cases of individual respondents. - Decision in the case of Abir Steel Rolling Mills 2013 (7) TMI 405 - CESTAT NEW DELHI followed - Decided against the revenue.

Summary

Issues:
1. Dismissal of appeal against Ambika Waste Management Pvt. Ltd.
2. Imposition of penalties on co-noticees in cases of clandestine removal.

Detailed Analysis:
1. The judgment involves appeals filed by the Revenue against Order-in-Appeal No: AGS (245)04/09 dated 01/12/2009 passed by the Commissioner of Central Excise & Customs (Appeals), Aurangabad. The appeals were disposed of by a common order due to a common question raised. The appeal against Ambika Waste Management Pvt. Ltd. was dismissed as the issue was settled by paying the entire duty liability, interest, and 25% of the penalty imposed. This rendered the appeal infructuous.

2. The appeals against other respondents raised the issue of clandestine removal and the alleged involvement of co-noticees in abetting such removal. The Revenue contended that penalties should have been imposed on the co-noticees. The adjudicating authority did not impose penalties on the co-noticees, citing Section 11A of the Central Excise Act, 1944, which concludes proceedings once duty liability and 25% penalty are paid. The first appellate authority upheld this reasoning and provided additional justifications for not imposing penalties on the co-noticees.

3. The judgment referenced case law and tribunal decisions to support the position that penalties should not be imposed on co-noticees once the main assessee settles the duty liability, interest, and penalty. The Tribunal's interpretation emphasized the importance of concluding proceedings against the main party to avoid penalizing co-accused disproportionately. The judgment highlighted the legislative intent behind Section 11A and settlement provisions to promote early resolution of tax disputes and avoid prolonged litigation.

4. The Tribunal's decision aligned with previous rulings and emphasized the need to interpret the law in a manner that upholds the objective of settling tax disputes efficiently. The judgment concluded that the impugned order was correct and legal, affirming the dismissal of the Revenue's appeals against the individual respondents. The appeals filed by the Revenue were ultimately rejected based on the detailed analysis and legal interpretations provided in the judgment.