Tribunal Order Granting Immunity Set Aside; HC Remands for Reconsideration Emphasizing Individual Liability.

The HC set aside the Tribunal's order granting immunity to the respondent, emphasizing that immunity to co-noticees does not absolve others of liability. Citing a Coordinate Bench's judgment and the SC's dismissal of a related Special Leave Petition, the HC remitted the matter back to the Tribunal for reconsideration on its merits.

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Appellant, Commissioner of Customs, impugns Tribunal order dated 10.05.2023 which allowed respondent's appeal against a penalty by applying immunity granted by the Settlement Commission to co-noticees. A common Show Cause Notice dated 14.08.2017 named several noticees; two main noticees obtained immunity from prosecution by the Settlement Commission's order dated 20.04.2018. The Tribunal held that a co-noticee was entitled to the same immunity. Reliance is placed on a Coordinate Bench judgment in CUSAA No. 88/2022 (M/s Seville Products Ltd. v. Commissioner of Customs & Exports) which held that "discharge of liability of one of the noticees either by making a payment without contest or by settlement before the Settlement Commissioner would not absolve other noticees from their liability." That decision was affirmed by the Supreme Court (SLP dismissed). Applying that precedent, the Tribunal's extension of immunity to the respondent is held unsustainable; the Tribunal order dated 10.05.2023 is set aside, the respondent's appeal is restored and remitted to the Tribunal for decision on merits in accordance with law.

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