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of <h1>Tribunal Dismisses Appeal as Infructuous; Overturns Penalties on Executives After Settlement Under SVLDRS 2019 Scheme.</h1> <h3>Shri. Shashi Kumar CEO M/s. Diamond Display Solutions Pvt. Ltd. Versus Commissioner of Central Excise Bangalore V Commissionerate, M/s. Diamond Display Solutions Pvt. Ltd. Versus Commissioner of Central Excise Bangalore V Commissionerate And Shri. R.G. Venkatesh, Managing Director, M/s. Diamond Display Solutions Pvt. Ltd. Versus Commissioner of Central Excise Bangalore V Commissionerate</h3> The Tribunal dismissed the appeal regarding the confiscation and clearance of seized goods as infructuous, due to the settlement under the Sabka Vishwas ... Confiscation of seized goods - provisional release on payment of redemption fine - penalty under Rule 25 of Central Excise Rules, 2002 - HELD THAT:- Since the main appellant has settled the issue under SVLDR Scheme, penalty imposed on co-noticees being the CEO and Managing Director of the main noticee is unsustainable. Similar issue decided in decision of the Tribunal in the matter of V K Agarwal Vs. CC, New Delhi [2023 (9) TMI 178 - CESTAT NEW DELHI] wherein it is held that 'without considering the directions given in the remand order and allowing cross examination, Commissioner has imposed penalties on the appellant, just for reason that the appellant did not settle the issue along with others under SVLDRS. Such approach of Commissioner cannot be justified. Even if the appellant has not approached under SVLDRS, Commissioner should have adjudicated as directed by Tribunal. No justification for imposition of penalty on reconsideration as per order of Tribunal is forthcoming.' Conclusion - When a demand is settled under the SVLDR Scheme, penalties on co-noticees should not be sustained. Since the issue is squarely covered by the decision of the Tribunal in the matter of VK Agarwal, there are no reason to differ - appeal allowed. ISSUES: Whether confiscation of seized goods is justified when clearance is allowed on imposition of redemption fine and penalty. Whether the penalty imposed on the CEO and Managing Director under Rule 26 of Central Excise Rules, 2002 is sustainable after settlement of the main demand under the Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS). RULINGS / HOLDINGS: The appeal concerning confiscation of seized goods and imposition of redemption fine and penalty is rendered infructuous due to settlement of the main demand under SVLDRS and is accordingly disposed. The penalties imposed on the CEO and Managing Director under Rule 26 of Central Excise Rules, 2002 are unsustainable once the main appellant has settled the demand under SVLDRS; the Tribunal allowed the appeals filed by them. RATIONALE: The Tribunal relied on the legal framework under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, which provides relief under section 124(1)(b) of the Finance Act, allowing settlement of legacy disputes with nil duty payment in certain cases. The Tribunal followed precedent from a prior decision holding that imposition of penalty fails when the main demand is settled under SVLDRS, as the relief available negates the basis for penalty. The Tribunal emphasized that penalties on co-noticees cannot be sustained if they did not independently opt for SVLDRS but the main demand was settled, and that the Commissioner's imposition of penalty without proper adjudication or consideration of SVLDRS directions was unjustified.
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