Separate adjudication of liability required before imposing joint recovery of credit, interest and penalty on multiple persons.

Liability for CENVAT credit, interest and penalty could not be fastened jointly and severally on multiple persons without separate adjudication of each person's role and liability. The Tribunal found that the impugned orders were internally inconsistent because the unit was treated as non-existent and fictitious, yet penalty was imposed on it and recovery was directed collectively from the individuals. As liability had not been determined in an individualised manner, the orders were unsustainable. The orders were set aside and the matters were remanded for fresh decision with liability to be fixed separately on each person.

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Issues: Whether the impugned orders imposing and recovering CENVAT credit, interest and penalty jointly and severally from the individuals, instead of determining each person's liability separately, were sustainable.

Analysis: The orders treated the unit as non-existent and fictitious, yet imposed penalty on that very unit and directed recovery of the amounts jointly and severally from the individuals. Such collective fastening of liability was found inconsistent with the Tribunal's earlier view that demands and penalties must be confirmed, if at all, by fixing liability on each person separately. Since the liability had not been determined in an individualised manner, the orders could not be sustained as passed.

Conclusion: The impugned orders were set aside and the matters were remanded for fresh decision with liability to be fixed separately on each person.

Final Conclusion: The appeals were not decided on merits, and the adjudicating authority was required to reconsider the matters afresh by determining individual liability separately.

Ratio Decidendi: Where liability for duty-related recovery, interest and penalty is sought to be fastened on multiple persons, it must be determined individually and cannot be imposed and recovered jointly and severally without proper separate adjudication.

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