Recovery from unrelated individuals barred where dues arose from a proprietary concern and no personal penalty was imposed.

Recovery of dues confirmed against a proprietary concern could not be directed against unrelated individuals where no individual penalty had been imposed under Rule 26(2) of the Central Excise Rules, 2002. The order noted the absence of any shown statutory provision permitting recovery of interest and penalties from persons not prima facie connected with the concern's activities, and held that such dues could at most be recovered from the proprietor. On that basis, the appellants established a prima facie case for protection pending appeal, and waiver of pre-deposit with stay of recovery was granted until disposal of the appeals.

---

---

Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery of amounts confirmed against a proprietary concern, where no individual penalty had been imposed on them.

Analysis: The amount demanded arose from alleged liability confirmed against the proprietary concern and its proprietor. The order recorded that no individual penalties had been imposed on the present appellants under Rule 26(2) of the Central Excise Rules, 2002. It further noted that there was no provision shown for recovering interest and penalties imposed on a proprietor or concern from other individuals, and that such dues could at the highest be recovered from the proprietor of the concern, not from persons not prima facie connected with the firm's activities. On that basis, the appellants were found to have made out a prima facie case for protection against recovery pending disposal of the appeals.

Conclusion: Waiver of pre-deposit was granted and recovery of the disputed amounts was stayed till disposal of the appeals.

Ratio Decidendi: In the absence of a statutory provision authorising recovery, dues confirmed against a proprietary concern cannot be recovered from unrelated individuals, and a prima facie showing of such lack of liability justifies waiver of pre-deposit and stay of recovery.

---