Salasar Ispat Pvt. Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
The CESTAT Mumbai considered appeals involving penalties imposed on co-noticees under Rule 26 of the Central Excise Rules, 2002, arising from proceedings against a main noticee. The main noticee had settled the entire dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme), and obtained a discharge certificate upon payment of the determined tax dues. Consequently, the appeal of the main noticee had already been disposed of by the Tribunal.
The co-noticees challenged the continuation of penalties imposed on them, arguing that once the main noticee had settled the dispute, no independent proceedings could survive against them, as their liabilities were consequential to the primary demand. They relied on several Tribunal decisions supporting the view that penalties against co-noticees cannot continue once the main demand is settled under the SVLDR Scheme. The appellants also contended on merits that there was no incriminating evidence linking them to the alleged violations, as no excess stock or discrepancies were found and statements relied upon were retracted and not subjected to cross-examination.
The department argued that the benefit of the SVLDR Scheme does not automatically extend to co-noticees who have not independently applied for it and supported the findings of the appellate authority. It was also submitted that opportunities for cross-examination had been provided, though witnesses did not appear.
