Kar Vivad Samadhan Scheme settlement bars later redemption fine and Section 11AC penalty on the same notice.

Where a show cause notice covering confiscation and duty-related penalty was settled under the Kar Vivad Samadhan Scheme, further adjudication on the same notice could not survive. Redemption fine on the confiscated molasses and tankers was therefore unsustainable, and a separate penalty under Section 11AC on the same settled subject matter was also not warranted. The stated principle is that statutory settlement under the Scheme bars continued proceedings for consequential monetary liabilities arising from the same cause of action.

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Issues: (i) Whether redemption fine could be sustained after the proceedings relating to confiscation of molasses and tankers stood settled under the Kar Vivad Samadhan Scheme; (ii) Whether penalty under Section 11AC could be separately imposed in respect of the same settled proceedings.

Issue (i): Whether redemption fine could be sustained after the proceedings relating to confiscation of molasses and tankers stood settled under the Kar Vivad Samadhan Scheme.

Analysis: The show cause notice covered confiscation of molasses and tankers, and that notice was specifically included in the declaration accepted under the Kar Vivad Samadhan Scheme. Once the dispute stood settled under the Scheme, the consequential adjudication on the same notice could not survive for imposing redemption fine.

Conclusion: The redemption fine was held to be validity and could not be sustained.

Issue (ii): Whether penalty under Section 11AC could be separately imposed in respect of the same settled proceedings.

Analysis: The allegation of non-payment of duty and the proposed penalty under Section 11AC formed part of the same show cause notice that had been settled under the Scheme. In view of the statutory settlement, a separate penalty on the same subject matter was not warranted.

Conclusion: The penalty under Section 11AC was held to be not called for and unsustainable.

Final Conclusion: The order of adjudication imposing redemption fine and penalty could not stand, and the appeal succeeded.

Ratio Decidendi: Once proceedings covered by a show cause notice are settled under the Kar Vivad Samadhan Scheme, further adjudication imposing redemption fine or penalty on the same cause of action is not sustainable.

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