Independent finding required for personal penalty; Rule 209A penalties set aside after Kar Vivad Samadhan Scheme settlement.

Penalties under Rule 209A of the Central Excise Rules, 1944 cannot be sustained without an independent finding establishing each appellant's individual role and basis of liability. A mere repetition of the show cause notice allegations is insufficient to justify personal penalty. The Tribunal also noted that the principal demand against the manufacturer had already been settled under the Kar Vivad Samadhan Scheme, and penalties on connected persons were not sustainable in the similar circumstances relied upon. The impugned penalties were therefore set aside and the appeals succeeded.

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Issues: Whether penalties imposed on the appellants under Rule 209A of the Central Excise Rules, 1944 could be sustained when the adjudication order contained no independent finding as to their individual role, and the main dispute had already been settled under the Kar Vivad Samadhan Scheme.

Analysis: The adjudicating authority merely referred to the allegations in the show cause notice and did not record any specific finding explaining how each appellant was liable for penalty. The order therefore lacked an independent and reasoned basis for fastening personal penalty. The Tribunal also noted that the principal demand against the manufacturer had already been settled under the Kar Vivad Samadhan Scheme, and in the similar situation relied upon, penalties on connected persons were held not to be sustainable.

Conclusion: The penalties under Rule 209A were not sustainable and were set aside.

Final Conclusion: The appeals succeeded and the impugned penalties were quashed.

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