Kar Vivad Samadhan Scheme settlement for principal noticee extends to co-noticees and ends penalty proceedings.

Where a common show cause notice is settled under the Kar Vivad Samadhan Scheme in favour of the principal noticee, the settlement operates as a full and final resolution for co-noticees on the same matter. The Board's Circular was treated as clarifying that civil proceedings for fine or penalty should not continue against co-noticees once the common dispute has been resolved under the Scheme. The Tribunal followed its earlier decisions on the same principle and accepted that the co-noticees could also rely on the settlement, bringing the connected appeals to an end.

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Issues: Whether the settlement accepted under the Kar Vivad Samadhan Scheme in favour of the principal noticee extended to the co-noticees so as to bring the pending appeals against them to an end.

Analysis: The appeals arose from a common show cause notice issued to the principal noticee and the co-noticees for duty and penalties. The principal company had filed a declaration under the Kar Vivad Samadhan Scheme, and that declaration had been accepted. The Board's Circular clarified that where a common matter is settled under the Scheme, no civil proceedings for fine or penalty should continue against co-noticees, and the settlement is deemed full and final in respect of the other persons on whom notices were issued on the same matter. The Tribunal also proceeded in the light of its earlier decisions applying the same principle.

Conclusion: The benefit of the settlement under the Kar Vivad Samadhan Scheme was held to extend to the co-noticees, and the contention of the appellants was accepted.

Final Conclusion: The connected appeals were brought to an end in accordance with the Board's Circular and the Tribunal's earlier view on the effect of a common settlement under the Scheme.

Ratio Decidendi: Where a common show cause notice is settled under the Kar Vivad Samadhan Scheme in favour of the principal noticee, the resulting settlement operates as full and final resolution for co-noticees as well, preventing continuation of civil penalty proceedings on the same matter.

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