Tribunal Reduces Penalty from Rs.10 Lakhs to Rs.50,000 Each, Citing Justice and Settlement Scheme Considerations.

The Tribunal reduced the penalty imposed on the appellants from Rs.10 lakhs each to Rs.50,000 each. This decision considered the settlement by the main noticee, M/s. Micro Spares, under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and the appellants' belief that they would be discharged as co-noticees. The Tribunal emphasized that reducing the penalty served the ends of justice, and the appeals were disposed of accordingly.

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Issues involved:
The issues involved in this case include evasion of central excise duty, abetting in suppressing the value of clearances, imposition of penalty under Rule 25 of Central Excise Rules, 2002, and the applicability of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

Evasion of Central Excise Duty:
The appellants, sister concerns of M/s. Micro Spares, were suspected of evading central excise duty by not disclosing the actual value of clearances and wrongly claiming SSI exemption despite exceeding the exemption limit. It was revealed that the appellants did not have manufacturing facilities and collaborated with M/s. Micro Spares to show separate clearances of goods on paper as entities with distinct legal standing. The department issued a Show Cause Notice proposing to club all their clearances for duty demand, leading to the imposition of a penalty of Rs.10 lakhs each on the appellants for abetting in suppressing clearances.

Applicability of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:
The main noticee, M/s. Micro Spares, settled the matter under the SVLDR Scheme and received a discharge certificate for full and final settlement of tax dues. The appellants, as co-noticees, believed that they would also be discharged automatically upon the main noticee's settlement. However, they failed to file a declaration under the SVLDR Scheme before its closure. The Tribunal considered the clarification by CBIC regarding co-noticees under the SVLDR Scheme and decided to reduce the penalty imposed on the appellants to Rs.50,000 each, emphasizing that a reduction in penalty would serve the ends of justice.

Conclusion:
In conclusion, the Tribunal modified the impugned order and reduced the penalty on the appellants to Rs.50,000 each, taking into account the settlement by the main noticee under the SVLDR Scheme and the circumstances of the case. The appeals were disposed of accordingly.

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