Fresh penalty notice after confirmed duty demand was unsustainable; penalty order set aside on settled adjudication principles

Penalty proceedings could not be initiated by a fresh show cause notice after the duty demand had already been adjudicated and confirmed. Once the earlier adjudication concluded the demand, a subsequent notice issued only to impose penalty was held unsustainable. The Tribunal relied on a prior Calcutta High Court view on an identical situation and noted that the Commissioner was expected to follow that position. The penalty order was set aside and the assessee succeeded.

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Issues: Whether penalty proceedings could be initiated by a fresh show cause notice after the duty demand had already been adjudicated and confirmed.

Analysis: The duty demand had been concluded in the earlier adjudication order, and the subsequent notice was issued only to impose penalty. The department's attempt to initiate penal proceedings after completion of adjudication was held to be unsustainable. The prior decision of the Calcutta High Court on an identical situation was relied upon, and the Commissioner was expected to follow that view.

Conclusion: The penalty order was set aside and the appeal was allowed in favour of the assessee.

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