2026 (2) TMI 119 - AT - Central Excise

Personal penalty under Rule 26 and settlement under the voluntary disclosure scheme bar co-noticee appeals; relief granted to appellant

When the primary tax liability is resolved by settlement under the voluntary disclosure scheme, appeals by co-noticees challenging personal penalties ... Challenged the personal penalty imposed under Rule 26 - HELD THAT:- We find that this Tribunal in the case of JPFL Films Private Limited & Others [2023 (12) TMI 304 - CESTAT CHANDIGARH] held that once the main appeal is settled under SVLDRS, 2019, the appeals filed by the co-noticees challenging the personal penalty arising out of the same impugned order cannot be sustained. This view of this Tribunal has been followed in the case of Shri Raghavendra, Plant Manager [2024 (5) TMI 1335 - CESTAT BANGALORE] Consequently, the appeal filed by the appellant deserves to be allowed and the same is allowed. Issues: Whether an appeal filed by a co-noticee challenging a personal penalty arising from an impugned order can be sustained where the main appeal in respect of the same impugned order has been settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS, 2019).Analysis: The Tribunal examined prior decisions holding that settlement of the principal appeal under SVLDRS, 2019 effectively precludes continuation of related appeals filed by co-noticees that challenge personal penalties arising from the same impugned order. The Tribunal applied that reasoning to the present appeal and noted that the main appeal in the related matter had been settled under SVLDRS, 2019, following which co-noticee appeals were held not to be maintainable.Conclusion: The appeal is allowed; the appeal by the co-noticee challenging the personal penalty cannot be sustained where the principal appeal has been settled under SVLDRS, 2019, and therefore the appellant's challenge to the personal penalty succeeds.