TMI Blog2016 (5) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... has been admitted before the Settlement Commission by the main party and settled. Thus it cannot be said that no offence meriting confiscation of goods was committed. Therefore, the penalty is imposable. - Decided against the appellant - Appeal No. E/400 to 405 & 565/11 - Final Order Nos. A/87374-87380/2016-WZB/SMB - Dated:- 27-4-2016 - SHRI RAJU, MEMBER (TECHNICAL) For the Petitioner : Shri Susanth Murthy, Advocate For the Respondent : Shri N.N. Prabhudesai, Supdt. (AR) ORDER PER: RAJU The appellants were also noticees in a case booked against Pratima Syntex, Thane. A show-cause notice demanding duty and for penalties against Pratima Syntex was issued. Notice for penalty against these appellants was also issued for their role. M/s Pratima Syntex approached Settlement Commission and Settlement Commission vide order dated 21.1.2008 finally settled the case. Later in respect of various other noticees, i.e. these appellants, the matter was adjudicated and proceedings were dropped by the original adjudicating authority on the grounds that the proceedings against the appellants cannot continue in view of the settlement of the case by the main noticee. Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in the present appeal. While delivering the majority judgment, the majority Members have relied upon the decision of the Honble Supreme Court as also of the Tribunal, which were pari materia on facts and in law and analysed the provisions of Section 127. As such, it cannot be said that majority order, which stand passed in precedent decision involving identical facts and law is not required to be followed as the same has not taken into consideration the Supreme Court judgment in the case of S.P. Chengalvaraya Naidu. The said judgment of the Honble Supreme Court was in altogether different facts and circumstances and under different provisions of law. He argued that there are plethora of judgments in which the decision of the Tribunal in the case of S.K. Colombowala (supra) was followed in similar circumstances. He further argued that there was no confiscation order and therefore, question of imposing penalty under rule 26 does not arise. For this purpose, he relied on the decision of the Tribunal in the case of Sharda Synthetics Ltd. Vs. Commissioner of Central Excise, Raigad 2014 (314) ELT 411. 2. Learned AR relies on the impugned order. He argued that the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In other words, the question to be considered is in a composite order, where the liability of the main noticee and the co-noticee arise under two independent causes of action and the main noticee settles the dispute under one cause of action, then whether the co-noticee, who is penalised for the other cause of action for which there is no settlement of tax arrears can claim immunity on the basis of declaration made by the main noticee He argued that the decision of Hon'ble Bombay High Court has been upheld by the Hon'ble Supreme Court as reported in 2004 (163) ELT A50 (SC). He argued that the decision of the Tribunal in case of S.K. Colombowala (supra) has not considered the decision of Hon'ble High Court in the case of Yogesh Korani (supra). He further argued that penalty can be imposed even in case where there is no confiscation. In this regard, he relied on the following decision: - (i) Amex Alloys Pvt. Ltd. Vs. Commissioner of Central Excise 2013 (296) ELT 229 (Tri-Chennai) (ii) Sanjay Vimalbhai Deora Vs. CESTAT 2014 (306) ELT 533 (Guj). (iii) Commissioner of Central Excise, Ahmedabad Vs. Navneet Agarwal 2012 (276) ELT 515 (Tri-Ahmd). 4. I h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of person entitled to file an application before the Settlement Commission, the case against all other noticees come to an end. It is seen that the decision was given relying on the decision of Honble Supreme Court in the UOI of India v. Onkar S. Kanwar [2002 (145) E.L.T. 266 (S.C.)] which was passed in the case of KVSS scheme. However the bench was not appraised of the order of the Hon High Court of Mumbai in the case of Yogesh Korani Vs Union of India 2003 (159) ELT 3 (Bom) which has been upheld by Hon Supreme Court as reported in 2004 (163) ELT A50 (SC). 4.2 The Larger Bench of Tribunal in case of S.K. Colombowala (supra) has held that the (a) While the provisions of KVS Scheme and those relating to settlement of cases under the Customs Act are not completely identical, the underlying objective in both the scheme is similar and it is for this reason that the case laws in respect of cases under KVSS including in the case of Onkar S. Kanwar do not become entirely irrelevant. It is seen that Section 90(3) of the Finance Act, 1998 (No. 2) in which the KVS Scheme was introduced reads as under: - (3). Every order passed under sub-section (1), determining the sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icee settles only part of the tax arrears arising out of composite order, then whether the benefit of K.V.S.S. granted to the principal noticee will be available to the co-noticee ? In other words, the question to be considered is in a composite order, where the liability of the main noticee and the co-noticee arise under two independent causes of action and the main noticee settles the dispute under one cause of action, then whether the co-noticee, who is penalised for the other cause of action for which there is no settlement of tax arrears can claim immunity on the basis of declaration made by the main noticee The decision of Hon'ble Bombay High Court in the case of Yogesh Korani (supra) has been maintained in Hon Supreme Court as reported in 2004 (163) E.L.T. A50 (S.C.) 4.4 It is seen that in the case of MODEST SHIPPING (AGENCY) PVT. LTD 2004 (167) E.L.T. 25 (Bom.) the Hon High Court of Mumbai had the occasion to examine a case after considering the law laid down in both the earlier decisions i) Yogesh Korani v. U.O.I. 2003 (159) E.L.T. 3 (Bom.) which was approved by Hon Supreme Court on 21.7.2003 ii) U.O.I. v. Onkar S. Kanwar 2002 (145) E.L.T. 266 (S.C.) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al filed by the petitioners were allowed to be withdrawn with liberty to the petitioners to make representation before the appropriate authorities. Accordingly, petitioners on 14th February, 2000 made a representation to the Customs authorities stating that in view of the acceptance of the declaration filed by M/s. Jindals, immunity be granted to the petitioners from payment of penalty. The representation made by the petitioners was rejected by the Deputy Commissioner of Customs on 12th March, 2000. Hence the present petition. 5. Mr. Rebello, learned Counsel for the petitioners submitted that in the present case the petitioners were acting as agents of M/s. Jindals and had filed the IGM as per the instructions given to them by M/s. Jindals. Subsequently, at the instance of M/s. Jindals, the IGM was amended. Misdeclaration, if any, in the IGM was at the instance of M/s. Jindals. By a common order dated 31st August, 1994, penalty was levied upon the petitioners as well as M/s. Jindals under Section 112(a) and (b) of the Customs Act, 1962. It was submitted that M/s. Jindals were the main noticee under the show cause notice and the petitioners were co-noticees. It was submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear the goods. It is seen that where a co-noticee acts as an employee of agent of the main notice, he gets the immunity but if he acts on his own he does not get the immunity. 4.6 In the instant notice the facts are similar to those in case of Yogesh Korani Vs Union of India 2003 (159) ELT 3 (Bom). (supra) in so far as duty has been demanded from the manufacturer but penalty is sought to be imposed on the brokers involved in sale of impugned goods. The facts of the case of Yogesh Korani Vs Union of India 2003 (159) ELT 3 (Bom) were similar to the current case. In the said case the facts are as follows: - 4. M/s. Choice Laboratories, a Partnership firm had obtained two advance licences from the Licensing authority which permitted them to import specified quantity of raw materials duty free with the corresponding export obligation. The said licences were with actual user conditions and could not be sold to third parties and the duty free goods imported under the said licences were required to be used in the manufacture of export items. Investigations carried out by the Customs Authorities revealed that M/s. Choice Laboratories had illegally sold glycerine and Sodium Lauryl S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e central figure in all these transactions and that he was concerned with import of goods valued at approximately Twenty-five lakhs on the basis of fraudulent documents. 7. Being aggrieved by the aforesaid order, all the four parties, namely; M/s. Choice Laboratories, M/s. Fresh Laboratories, M/s. Ratilal Hemraj and the Petitioner herein filed appeals before CEGAT, Mumbai. During the pendency of said appeal before CEGAT, M/s. Choice Laboratories filed declaration under Kar Vivad Samadhan Scheme, 1998 (K.V.S.S.in short) admitting their liability only in respect of confiscated glycerine, S.L.S. and peppermint oil (but not on Clove Bud Oil) and paid customs duty thereof, as contemplated under K.V.S.S. The said declaration was accepted by the authorities and requisite certificate was issued in favour of M/s. Choice Laboratories under K.V.S.S. 8. When all the aforesaid four appeals were taken up for final hearing by CEGAT, M/s. Choice Laboratories produced the aforesaid certificate issued under K.V.S.S. and on the basis of the said certificate, the Tribunal by its common order dated 11th March, 2002 dismissed the appeal of M/s. Choice Laboratories as withdrawn. By the said ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from whom duty is demanded would also get immunity. It cannot be the intention of the legislature. 4.8 It is seen that earlier in the case of K.I. INTERNATIONAL LTD. 2012 (282) E.L.T. 67 (Tri. - Chennai) had differed from the decision of the tribunal in case of S.K. Colombowala (Supra) and therefore the matter was referred to the President for constitution of a larger bench. The said reference was not answered by the larger bench in the said case of Rajesh Vs CC 2013-TIOL-1770-Cestat-Mad-LB was denied on the grounds that the decision in case of K.I. INTERNATIONAL LTD (Supra) was challenged before Hon HC of Chennai and the matter was pending there. However in the instant case the decision of Hon HC of Mumbai in the case of Yogesh Korani (supra), which was approved by Hon SC, has not been considered by the tribunal in case of S.K. Colombowala (Supra). A decision in which a particular matter is not discussed upon is said to be passed sub silentio in respect of that particular matter and cannot be relied as a precedent for that specific matter which is not discussed upon. Hon Supreme court has in the case of Municipal Corporation of Delhi v. Gurnam Kaur - (1989) 1 SCC observed as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith, Ltd., [1941] 1 KB 675. the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. We went on to say that the point had to be decided by the earlier court before it could make the order which it did; nevertheless, since it was decided without argument, without reference to the crucial words of the rule, and without any citation of authority , it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopened. The weight accorded to dicta varies with the type of dictum. Mere casual expressions carry no weight at all. Not every passing expression of a Judge, however eminent, can be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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