Recovery attachment for a set-aside penalty cannot survive, though admitted excise dues may still be recovered separately.

A recovery attachment cannot continue to enforce a personal penalty against a retired partner once the adjudication order imposing that penalty has been set aside in appeal; the penalty ceased to survive and the bank account attachment for that demand was unsustainable. The Court nevertheless accepted the revenue's statement on the admitted outstanding excise dues and held that the petitioner remained liable only for that balance amount. On payment within the stipulated time, the attachment was directed to be lifted. The ruling confirms that a recovery measure based on a set-aside penalty cannot stand, while admitted dues may still be recovered separately.

---

---

Issues: (i) Whether the bank account attachment could be continued to recover a personal penalty imposed on a retired partner when the order of adjudication containing that penalty had been set aside; (ii) whether the petitioner was liable only for the admitted balance excise dues and, on payment, was entitled to have the attachment lifted.

Issue (i): Whether the bank account attachment could be continued to recover a personal penalty imposed on a retired partner when the order of adjudication containing that penalty had been set aside.

Analysis: The penalty had been levied on the petitioner under Section 209A of the Central Excise Rules, 1944 in his capacity as a partner. The order in original, which included that penalty, was subsequently set aside in appeal. Once the underlying adjudication was set aside, the personal penalty founded on that order could not be pursued by attaching the petitioner's bank account. The petitioner's retirement from the firm was also undisputed.

Conclusion: The personal penalty did not survive, and the attachment could not be sustained for recovery of that penalty.

Issue (ii): Whether the petitioner was liable only for the admitted balance excise dues and, on payment, was entitled to have the attachment lifted.

Analysis: The Court accepted the revenue's statement regarding the outstanding balance of the admitted demand after prior recoveries. It held that the petitioner remained liable only for the balance amount computed before the Court, not for the set-aside penalty demand. The Court directed payment of the balance within the stipulated time, with the attachment to be raised upon compliance.

Conclusion: The petitioner was liable to pay only the admitted balance dues, and the attachment was to be raised on compliance.

Final Conclusion: Relief was granted against recovery of the personal penalty, while the admitted balance excise dues were directed to be paid within the stipulated period, with consequential lifting of the bank attachment on compliance.

Ratio Decidendi: A recovery measure founded on a penalty cannot survive once the adjudication imposing that penalty has been set aside, though admitted outstanding dues may still be recovered separately.

---