Custom, Excise & Service Tax Tribunal
Prakash Steelage Ltd vs Bharuch on 6 November, 2024
1|Page E/10911/2017
E/10309,10687,10689,10693/2019
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench at Ahmedabad
REGIONAL BENCH- COURT NO. 3
Excise Appeal No. 10911 of 2017- DB
(Arising out of Order No. OIO-BHR-EXCUS-000-COM-16-17 dated 25.01.2017 passed by
Commissioner of Central Excise, Customs & Service Tax-Bharuch)
Prakash Steelage Ltd. ........Appellant
1st Floor, Shatrunjay Apartment, 28, Sindhi Lane,
Mumbai-Maharashtra
VERSUS
C.C.E.& S.T. Bharuch ......Respondent
Vadodara-Ii,Gst Bhavan,Subhanpura,Vadodara Vadodara-Gujarat-390023
(i) Excise Appeal No 10309 of 2019 (Dhara Engineering Works)
(ii) Excise Appeal No 10687 of 2019 (Samruddhi Steels)
(iii) Excise Appeal No 10689 of 2019 (Kashiparekh Bros)
(iv) Excise Appeal No 10693 of 2019 (Aesh Steels) (Arising out of Order No. OIA-VAD-EXCUS-001-APP-529-534-2018-19 dated 21.12.2019 passed by Commissioner (Appeals) - Vadodara-I) APPEARANCE:
Present for the Appellant: Shri P.K. Shetty, N.K. Oza & Shri A.X.S. Jiwan, Consultant and Advocates Present for the Respondent: Shri R.K. Agarwal with Shri R.R.Kurup, Authorised Representative CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU FINALORDER NO.___12591-12595/2024 DATE OF HEARING: 17.10.2024 DATE OF DECISION: 06.11.2024 RAMESH NAIR The issue involved in the present case is that when the case of main appellant involved demand of duty interest and penalty has been settled under SVLDRS-2019 whether the penalty on co-noticees can be continued or otherwise?
2. Shri P.K. Shetty, A.X.S, Jiwan and Shri N.K. Oza counsels and consultant appeared on behalf of the appellants. They submitted that now it is a settled law that when the main case of demand of duty is settled under SVLDRS-2019, the penalty on the co-noticee will not sustain. They relied on the following judgments:
Anil K Modani vide Final Order No. A/87176-87178/2023 dated 30.11.23 Vikas Agarwal Final Order No. A/11738/2021 Uni Deritend Ltd. 2011 (272) ELT 312 (T. Mum) Ispat Indus. Ltd. 2008 (226) ELT 218 (T-Mum)
2|Page E/10911/2017 E/10309,10687,10689,10693/2019 Steel Tubes of India 2007 (217) ELT 506 (T-LB) Shree Naklank Ltd. 2019 (365) ELT 407 (Guj) Mamta Garg 2018 (59) ELT 77 (Tri. Del.) Sanjay Vimalbhai Deora - CESTAT affirmed 2014 (309) ELT A131 (SC) Naresh Agarwal Final Order No. A/10567/2020 dated 27.02.2020 Mangalam Drugs A/12582-12584/2018 dated 14.11.2018 Rajeev Reniwal A/10972/2018 dated 15.03.2018 Paragon Steels P Ltd. 2018 (15) GSTL 298 (Tri Bang) Goyal Ispat Ltd. 2017 (6) GSTL 201 (Tri. Chennai)
3. Shri R.K. Agarwal and Shri R.R. Kurup, learned Superintendents (Authorised Representatives) appeared on behalf of the respondent reiterate the finding of the impugned order and relied on the following judgments:
Cestat Chennai vs Four R Associates 2023 (11) TMI (9)???
4. On careful consideration of the submission made by both the sides and perusal of the records, we find that as of now it is settled that once the duty demand case is settled under SVLDRS-2019, as per Scheme itself, there is a waiver of penalties on the main assessee against whom the demand was confirmed as well as on other co-noticees. Some of the judgments on this issue are reproduced below:
Anil K Modani vide Final Order No. A/87176-87178/2023 dated 30.11.23 " We find that the decision in re Indi-Swift Laboratories Ltd, relied upon by the Learned Authorised Representative, was in the specific context of „conjunctions‟ employed in rule 14 of CENVAT Credit Rules, 2004 and the consequence thereof for recovery of credit along with interest. Chapter V of Finance Act, 2019 expressly pertains to „legacy dispute resolution scheme‟ which considered deposit of duty involved in dispute to suffice for grant of relief of interest, penalty and any other consequence under Central Excise Act, 1944 or Finance Act, 1944. The scheme is all about „tax dues‟ which itself has been set out in section 123 of Finance Act, 2019 with all the alternatives restricting themselves to the total amount of duty or total amount of duty in dispute, as the case may be. Furthermore, section 124 of Finance Act, 2019 specifies relief as percentage of „tax dues‟ and of late fee/penalty should those be the only detriments contemplated in a proceeding. It would, therefore, appear that a person imposed with penalty would be eligible to be „declarant‟ subject to there being no demand of tax pending in the impugned proceedings.
6. Therefore, to the extent that the impugned order upheld recovery of duties under section 11A of Central Excise Act, 1944 none of the individual appellant herein would have been eligible to be declarant; the scheme itself does not acknowledge the existence of such appellant even though the scheme is intended to erase the detriment of penalty in each and every case. It is on record that the principal-noticee has been accorded the prescribed relief including erasure of penalties arising therefrom. Even though the appellants herein could not, at the time of existence of the scheme have derived the benefits from the coverage by the scheme, the intent and purpose of the scheme being collection of the duty or some percentage thereof, and forgoing interest, fine and penalty, the disposal of the application of M/s JSW Ispat Steel Ltd renders the continuance of the penalty against the three appellants to be not in conformity with the relief scheme. Accordingly, they are eligible for erasure of the penalties against them.
7. For the above reasons, we allow these appeals and set aside the impugned order."
Subhash Panchal vide Final Order No. 11014 of 2024 dated 08.05.2024 "In this appeal the appellant has challenged the personal penalty of Rs.50,000/- under Rule 26 of Central Excise Rules, 2002. The penalty was imposed on the charge of abating the evasion of duty by M/s. Atlas Plastics.
When the matter was called out written submission was placed on record by the appellant wherein it is submitted that the main party's case of M/s. Atlas Plastics has been settled under SVLDRS 2019 and this Tribunal has disposed of appeal vide order No. 12602/2023 dated 07.11.2023 in the light of the settlement of the case of main party, hence the personal penalty of appellant be set aside. It is also submitted that the appellant has not played any role for evasion of duty by M/s. Atlas Plastics.
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2. Shri P Ganesan Learned Superintendent AR appearing for the revenue reiterates the finding of the impugned order.
3. We have carefully considered the submission made by the Learned AR and the Written Submission dated 31.01.2024 submitted by the appellant. Since, the appellant has been penalized under Rule 26 in connection with the duty evasion made by M/s. Atlas Plastics and their case has been settled under SVLDRS and the appeal was disposed by this Tribunal vide order dated 07.11.2023, the personal penalty of the appellant is not sustainable in the light of the following judgments:-
Shri V.K. Aggarwal and Shri J.K. Aggarwal v. CCE, New Delhi - 2023 (9) TMI 178 - CESTAT NEW DELHI M/s. Siemens Ltd. (formerly known as M/s. Morgan Construction Co. Pvt. Ltd. ), Mr. Sunil Chellani Vs. Commissioner of Central Excise, Mumbai-III - 2023 (5) TMI 377 - CESTAT-Mumbai Shri B.V. Kshatriya Vs. Commissioner of GST & CE, Nashik - 2023 (5) TMI 858 - CESTAT Mumbai Mr. Dinesh Kanoria Vs. Commissioner of Central Excise, Thane-I - 2022 (12) TMI 1408 - CESTAT Mumbai Shri Ramesh Despande and Shri Debdutta Chatterjee Vs. Commissioner of Central Excise, Nagpur - 2021 (7) TMI 1307 - CESTAT - Mumbai P.B. Vyas and Ors. Vs. Commissioner of Central Excise, Mumbai-III -2021 (3) TMI 1305 - CESTAT Mumbai Sri Sasthi Charan Banerjee Vs. Commissioner of CGST & CX, Bolpur Commissionerate, - 2022 (12) TMI 1437 - CESTAT Kolkata In view of the above judgments, it is settled that once the main case of duty evasion is settled under SVLDRS 2019 the penalty on the Co-appellant shall not survive.
4. Accordingly, the penalty is set aside. The Appeal is allowed."
In view of above judgments given by the two coordinate Division Benches, the penalties imposed on the co-noticees in a case where the main noticee against whom the demand is confirmed, the case is settled under SVLDRS then in respect of other co-noticees penalty will not sustain even if they have not filed a declaration under SVLDRS-2019 and decision on the issue of SVLDRS-2019 in the case of Four R Associates and others reported as 2023 (11) TMI 9 CESTAT-Chennai given by Single Member Bench whereas the aforesaid cited decisions are given by Division Bench. Therefore, Division Bench judgment will prevail over Single Member Bench.
5. Accordingly, the penalties on the appellants are not sustainable. Hence the same are set aside. Appeals are allowed.
(Order pronounced in the open court on 06.11.2024) (RAMESH NAIR) MEMBER (JUDICIAL) (RAJU) MEMBER (TECHNICAL) Neha