PENALTY ON EXCISE AUTHORISE SIGNATORY EMPLOYEE

[BHAKTIKANT BHATT]

sir,

i am working in private company manufacturing milk packaging material. in the year 2000 Excise preventives Department raid in company and book a case i am authorise signatory of the said company . our proprietor apply Settlement commission against this case . settlement commission give a order to pay Amount with interest . our company pay it. Settlement commission also granted us immunity from case. our company is already wind up it business and shut down.

Now dt 08/01/2021 Receive Notice from department to me that you are authorise signatory of company during the case book 20years ago, they charge penalty on me when settlement commission granted immunity from case and penalty.

sir i simply employee of the company that time and i do as per instruction of my boss

kindly give any suggestion or judgement which help me.

.waiting for ;your feedback sir.

Thanking You.

.

Excise Department go aganist Settlement commission

[KASTURI SETHI]

Dear Querist,

It depends upon case to case. The following case laws can help you. There more case laws in your favour. You will have trace out.

2000 (117) E.L.T. 69 (Tribunal) = 2000 (1) TMI 79 - CEGAT, COURT NO. I, NEW DELHI Z. U. ALVI Versus COMMISSIONER OF C. EX., BHOPAL

2017 (357) E.L.T. 1163 (Tri. - Del.) = 2017 (5) TMI 871 - CESTAT NEW DELHI MANOHAR SINGH RANA Versus COMMISSIONER OF CENTRAL EXCISE, INDORE

[KASTURI SETHI]

Dear Querist,

Here are three more case laws in your favour:-

2002 (144) E.L.T. 442 (Tri. - Del.) = 2002 (4) TMI 414 - CEGAT, NEW DELHI PROTECH ENGG. INDS. PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, DELHI

2010 (260) E.L.T. 301 (Tri. - Del.) = 2010 (6) TMI 446 - CESTAT, NEW DELHI FLEX INDUSTRIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, NOIDA

1998 (104) E.L.T. 39 (Tribunal) = 1998 (6) TMI 198 - CEGAT, CALCUTTA MOTILAL PADAMPAT UDYOG Versus COMMISSIONER OF C. EX., PATNA

[Rajagopalan Ranganathan]

Sir,

Since the demand has been raised after 20 years from the relevant date (that is from the date on which demand had been raised on the company in which you were employed), the notice issued by the Department is time barred. The Department cannot enforce the notice under the provisions of Central Excise Act, 1944.

[KASTURI SETHI]

In my view, it is a letter dated 8.02.2021 (and not SCN) which is in pursuance of already issued SCN against which the main party opted for going to Settlement Commission and the querist was not an applicant in Settlement Commission. The querist is simply calling it a notice. Actually, it is a letter.

[Sumit Srivastava]

Sir,

It is unfortunate that the department has chosen to rob your sleep by this belated action.

Assuming that you were a co-noticee in the subject SCN but could not participate in the Settlement proceedings, either at the SCN stage or at any other pending stage, because you were unaware that the main noticee had gone for settlement, which possibility can be because you had already left the company by that date, even then this portion of the SCN could not have remained open for eternity.

The provisions of section 32M are clear in this regard -

Section 32M. Order of settlement to be conclusive.-

Every order of settlement passed under sub-section 1(5) of section 32F shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter, be reopened in any proceeding under this Act or under any other law for the time being in force.

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So, in view of the case laws meticulously picked by the one and only learned and respected Kasturiji, the law is by your side and you cannot be asked to pay any penalty. These are proceedings being conducted by the department in vacuum perhaps because they are unaware of the law. Once you bring these case laws to their notice, they would surely be glad to follow it.

The querist should also find solace in the following order of the Tribunal -

2004 (12) TMI 195 - CESTAT, MUMBAI SHITALA PRASAD SHARMA, MANOJ SHARMA Versus  CCE, MUMBAI-I

[KASTURI SETHI]

Sh.Sumit Srivastava Ji,

Really you have worked hard in tracing out relevant case laws in favour of the querist.

AI Summary

Settlement commission immunity bars later penalty enforcement against former signatories, preventing reopening of settled excise matters. A former authorised signatory received a late departmental notice seeking penalty despite the company having paid amounts and obtained immunity under a Settlement Commission order. The principal legal contention is that a Settlement Commission order is conclusive under Section 32M and precludes reopening of matters and imposition of penalty; contributors also contend the action may be time barred and that tribunal precedents support non-liability of an employee signatory who acted under employer instruction.