Parity in penalty proceedings requires co-noticees to receive the same benefit where the principal noticee has obtained immunity.

Penalty under Rule 209A of the Central Excise Rules, 1944 was examined in the context of identical allegations against co-noticees after the principal noticee had already been granted immunity for the same transaction. The analysis applied parity and equity, noting that the adjudicating authority itself had treated a further penalty for the same cause of action as impermissible. On that basis, differential treatment of co-noticees was not justified, and the penalty on the appellants was set aside.

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Issues: Whether penalty imposed on the appellants under Rule 209A of the Central Excise Rules, 1944 was liable to be set aside when immunity had already been granted to the main noticee in respect of the same transaction and allegations.

Analysis: The penalty order proceeded on the same allegations for which the main noticee had already been granted relief, and the adjudicating authority had itself considered a second penalty for the same transaction as impermissible. Once immunity had been extended to the principal noticee on the same cause of action, the co-noticees stood on the same footing for the purpose of penalty, and differential treatment was not justified. On principles of equity and parity, the same benefit had to follow for the other noticees.

Conclusion: The penalty imposed on the appellants was set aside and the issue was decided in favour of the appellants.

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