Co-noticee penalty falls with legacy dispute settlement when the main demand is resolved under Sabka Vishwas scheme.

When the main noticee settles the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, a separate personal penalty on a co-noticee arising from the same show cause notice does not survive. The Tribunal treated the penalty as purely consequential to the resolved demand and, following its earlier decisions in similar matters, held the penalty unsustainable. The personal penalty on the co-noticee was set aside.

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Issues: Whether the personal penalty imposed on a co-noticee could survive after the main noticee had settled the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

Analysis: The appeal turned on the settled position that when the main dispute has been resolved under the legacy dispute resolution scheme, the basis for sustaining a separate penalty on the co-noticee in the same proceedings does not survive. The penalty arose from the same show cause notice and was only consequential to the demand against the main noticee. In view of the Tribunal's earlier decisions in similar matters, the personal penalty was found unsustainable.

Conclusion: The penalty on the appellant was set aside.

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