Tribunal overturns order on redemption fine, deems it incorrect and illegal, directs reconsideration within three months.

The Tribunal set aside the Chief Commissioner's order rejecting compounding applications based on non-payment of redemption fine, deeming it incorrect and illegal. The Tribunal found that without a clear proposal for the redemption fine in the Show Cause Notice and Order-in-Original, there was no crystallized demand against the noticees, preventing the department from recovering the fine. The appeals were allowed, directing the Chief Commissioner to reconsider the compounding applications within three months and issue a new decision.

---

---

Issues: Rejection of compounding applications based on non-payment of redemption fine.

Analysis:
The appeal was filed against the Chief Commissioner's order rejecting compounding applications due to non-payment of redemption fine. The appellant argued, citing a judgment by the Hon'ble Gujarat High Court, that there was no liability for redemption fine as the Show Cause Notice (SCN) did not propose its imposition. The appellant contended that since the OIO did not direct the fine to be borne by the noticee, the department could not recover the fine. The appellant emphasized that there was no crystallized demand against them, thus no question of redemption fine. The Revenue, represented by the Ld. Asst. Commissioner, reiterated the findings of the impugned order.

Upon hearing both sides and examining the records, the Tribunal noted that the compounding applications were rejected solely due to non-deposit of the redemption fine. Referring to the Hon'ble Gujarat High Court's decisions on similar cases from the same SCN and Adjudication Order, the Tribunal observed that without a clear proposal for redemption fine in the SCN and OIO, there was no crystallized demand against each noticee. Consequently, the department could not recover the fine from the noticee. Therefore, the rejection of the compounding application based on non-payment of redemption fine was deemed incorrect and illegal. The Tribunal set aside the impugned order, allowing the appeals. The Chief Commissioner (Competent Authority) was directed to reconsider the compounding application within three months from the date of the order and issue a fresh decision.

---