Case Law Details
M/s. Rajhans Enterprises Vs Commissioner of Central Tax (CESTAT Bangalore)
Commissioner (A) has allowed the appeal of the firm and set aside the duty demand and the penalty; however, penalty under Rule 26 of the Central Excise Rules, 2002 imposed on the Managing Partner of the appellant-firm was upheld on the ground that no separate appeal has been filed by the Managing Partner. He further submitted that the Commissioner (A) has wrongly held that there is no concept of joint appeal and the Managing Partner has to separately file an appeal under Rule 3(1) and (2) of the sub-rules. It is his further submission that a joint appeal is very much permissible under law because it is a firm and not a company and in the case of firm, the appeal was filed challenging the demand on the firm as well as the penalty imposed on the Managing Partner of the firm.
Held by CESTAT
After considering the submissions of both the parties and perusal of the material on record, CESTAT find that there was joint appeal filed by the firm as well as the Managing Partner of the firm and the Commissioner (A) vide the impugned order has allowed the appeal of the firm on merit and dropped the demand as well as penalty but upheld the penalty of Rs.1,10,000/- on Shri A. Ravindranath, Managing Partner under Rule 26 of Central Excise Rules. Further, I find that once the appeal of the firm has been allowed on merit, then the penalty on the Managing Partner cannot be imposed under Rule 26 of the Central Excise Rules. For this, CESTAT find support in the decisions relied upon by the appellant cited supra. Further, I find that in the decision relied upon by the appellant, it has been held that a joint appeal is permissible by the firm as well as the Partner because under Law a Partnership Firm is not a separate legal entity as in the case of Company under the Companies Act.
CESTAT allowed the appeals of the appellant by setting aside the impugned order imposing the penalty on the Managing Partner under Rule 26 of the Central Excise Rules, 2002 merely on the ground that he has not filed a separate appeal.
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