Penalty unsustainable where remand directions were ignored and Sabka Vishwas non-availment alone could not justify re-imposition.

Penalty under the Central Excise Rules could not be sustained merely because the appellant did not opt for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, when the main noticee and other co-noticees had settled their disputes. The Tribunal noted that the matter had earlier been remanded for fresh adjudication with directions to examine the record, allow cross-examination of relied-upon persons, and consider the materials on the alleged job work and exemption claim. As those remand directions were not properly followed and the issue was not adjudicated on merits, the Commissioner's re-imposition of penalty was held unsustainable, and relief was granted to the appellant.

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Issues: Whether the penalty imposed on the appellant was sustainable after the main noticee and other co-noticees had settled the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and whether the Commissioner was justified in re-imposing penalty without following the Tribunal's remand directions and without granting effective adjudication on the merits.

Analysis: The matter had earlier been remanded for fresh adjudication with directions to examine the record, permit cross-examination of persons relied upon, and consider the relevant materials concerning the alleged job work and the exemption claim. Instead of deciding the matter afresh on the remand directions, the Commissioner proceeded mainly on the footing that the appellant had not opted for the Sabka Vishwas scheme while the main noticee and other co-noticees had obtained relief. The order also rested on the alleged role of the appellant in the exemption claim and invoked the penal provisions under the Central Excise Rules. The Tribunal held that non-availment of the scheme by the appellant by itself could not justify sustaining the penalty when the remand directions had to be complied with and the issue had to be adjudicated on merits.

Conclusion: The penalty was not sustainable, and the appellant was entitled to relief.

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