recovery of penalty imposed on the director from the refund of company

[Hariharan Sundaram]

Respected experts, One of my client submitted a refund claim consequent of an order of the tribunal. While sanctioning the refund , the Deputy commissioner has deducted certain amount owing to penalty imposed on the director. whether any recovery mechanism avaliable in Central Excise to recover the penalty imposed on the Director of the company from the amount of refund due to the Company? Kindly let your views with circulars / case laws thank you

AI Summary

Separate legal personality prevents recovering a director's personal penalty from a company's excise refund; partner penalties differ.
A director's personal penalty cannot be recovered from a company's excise refund because the company and its directors are distinct legal persons; recovery requires the director's consent or voluntary payment by the company. By contrast, a penalty on a partner may be adjusted against refunds payable to a partnership firm, while LLPs are treated as companies and do not permit recovery of partner penalties from the LLP's refunds.