Penalty Annulled as Primary Case Settled Under SVLDRS-2019; Tribunal Sets Aside Rule 26(1) Fine for Duty Evasion Abetment.

The Tribunal set aside the personal penalty imposed on the appellant under Rule 26(1) of the Central Excise Rules, 2002, for abating duty evasion by M/s. Phenix Construction Technologies. The Tribunal found the penalty unsustainable since the main case was settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and the appeal related to that case was already disposed of. The decision was influenced by precedents indicating that penalties on co-noticees should not stand once the primary case is resolved under SVLDRS-2019. Consequently, the appeal was allowed, and the penalty was annulled, with the decision pronounced on 08.05.2024.

---

---

Issues involved: Challenge to personal penalty imposed under Rule 26(1) of Central Excise Rules, 2002 for abating duty evasion by M/s. Phenix Construction Technologies.

Summary:

Issue 1: Personal Penalty Imposed under Rule 26(1)
The appellant challenged the personal penalty imposed under Rule 26(1) of Central Excise Rules, 2002 for abating duty evasion by M/s. Phenix Construction Technologies. The appellant's representative argued that the main party's case had been settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and the Tribunal had already disposed of the appeal in light of this settlement. It was contended that the appellant had not played any role in the duty evasion by M/s. Phenix Construction Technologies.

Issue 2: Consideration of Submissions
Both sides' submissions were carefully considered, and it was noted that the appellant was penalized in connection with duty evasion by M/s. Phenix Construction Technologies. However, since the case of M/s. Phenix Construction Technologies had been settled under SVLDRS-2019, and the Tribunal had already disposed of the appeal related to that case, the personal penalty on the appellant was deemed unsustainable. The Tribunal referred to various judgments, including Shri V.K. Aggarwal and Shri J.K. Aggarwal v. CCE, New Delhi, to support the decision that once the main case of duty evasion is settled under SVLDRS-2019, the penalty on the Co-Noticee/appellant should not stand.

Decision:
In light of the above judgments and the settlement of the main case under SVLDRS-2019, the penalty imposed on the appellant was set aside, and the appeal was allowed. The decision was pronounced in the open court on 08.05.2024.

---