When proceedings against manufacturer stand concluded on payment of disputed amount of duty along with interest and penalty, no penalty would be imposable

CA Bimal Jain

When proceedings against manufacturer stand concluded on payment of disputed amount of duty along with interest and penalty, no penalty would be imposable under Rule 26 of the Excise Rules on other persons like traders

Facts:

Ambika Waste Management Pvt. Ltd. (the Respondent) has settled the issue by paying the entire amount of duty liability, interest thereof and 25% of the duty as penalty imposed by the Department. However, the Department imposed penalty under Rule 26 of the Excise Rules on Ambadas Santosh Ngargoje, Harish kumar Harji vandas Gandhi, Shree Salasar Ispat Pvt. Ltd. (the other Respondents) on the ground that there was clandestine removal in the case of the Respondent and the other Respondents played an important role in abetting such clandestine removal.

Held:

The Hon’ble CESTAT, Mumbai has relying upon the case of Commissioner of Central Excise, Raipur Vs. Abir Steel Rolling Mills [2013 (7) TMI 405 – CESTAT NEW DELHI], held that when the proceedings against the Respondent stand concluded on payment of disputed amount of duty along with interest and 25% of the duty as penalty, there would be no sense in continuing the proceedings for imposition of penalty under Rule 26 of the Excise Rules against the other Respondents like traders who had purchased the goods, transporters who had transported the goods cleared by the Respondent, the Directors/employees of the Respondent.

(Author can be reached at Email: bimaljain@hotmail.com)

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