Penalty on partnership firm and partners cannot be imposed simultaneously; conflicting manufacture views also led to setting aside penalties.

Penalty was held unsustainable where the Tribunal noted conflicting earlier views on whether assembling units of a data processing system amounted to manufacture, and it declined to decide that issue. The Tribunal further observed that penalty could not be imposed simultaneously on a partnership firm and its partners. On that basis, the penalties imposed on the appellants were set aside.

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Issues: Whether the penalties imposed on the appellants were sustainable, including whether penalty could be imposed simultaneously on the partnership firm and its partners.

Analysis: The Tribunal declined to express any view on whether the activity of assembling various units of a data processing system amounted to manufacture. On the question of penalty, it noted that the Tribunal itself had taken diametrically opposite views on the manufacture issue in earlier decisions, and also that penalty could not be simultaneously imposed on a partnership firm and its partners.

Conclusion: The penalties imposed on the appellants were set aside.

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