Co-noticee penalty proceedings do not survive once the main noticee's dispute is settled under the Kar Vivad Samadhan Scheme.

Acceptance of the main noticee's declaration under the Kar Vivad Samadhan Scheme, 1998 was treated as extinguishing the connected penalty proceedings against co-noticees arising from the same dispute. The Tribunal applied the settled position that, once the principal dispute is settled under the scheme, ancillary fine or penalty proceedings against co-noticees do not survive. The connected penalty appeals were therefore covered by the settlement of the principal matter and disposed of accordingly.

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Issues: Whether penalty proceedings against co-noticees survive after the main noticee's dispute is settled under the Kar Vivad Samadhan Scheme, 1998.

Analysis: The Tribunal followed the settled position that, where the declaration of the main noticee is accepted under the scheme, proceedings for fine or penalty against co-noticees do not survive. On that basis, the connected penalty appeals were treated as covered by the settlement of the principal dispute.

Conclusion: The penalty proceedings against the co-noticees were held not to survive and the appeals were disposed of accordingly.

Final Conclusion: Co-noticee penalties could not be pursued once the main noticee's dispute had been settled under the scheme, so the connected appeals stood concluded in the appellants' favour.

Ratio Decidendi: Acceptance of the main noticee's declaration under a settlement scheme abates penalty proceedings against co-noticees arising from the same dispute.

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