No Imposition of Penalty if Cause of Action itself does not Survive: CESTAT [Read Order]

The New Delhi bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that no imposition of penalty if cause of action itself does not survive.

The appellant, Shri Rakesh Kumar Tibra, Shri Rajesh Kumar Khandelwal, Shri Prahlad Gupta and Shri Suresh Kumar Tibra,  are petty distributors / sub-distributors of cigarettes, pan masala and other similar products of various small brands including Lucky Tobacco Co. Pvt. Ltd.

A Penalty of Rs.2 lakh each under Rule 26 of Central Excise Rules, 2002 was imposed on these appellants on the findings that these appellants are engaged in purchasing of cigarettes manufactured and clandestinely cleared by Lucky Tobacco Co. Pvt. Ltd.

The counsel for the appellant submitted before the Tribunal that the Tribunal while deciding the appeal of Lucky Tobacco Co. Pvt. Ltd. set aside the demand, holding that no evidence to establish manufacture and clandestine removal of alleged quantities of cigarettes and set aside the impugned order against Lucky Tobacco Co. Pvt. Ltd. Hence the penalty on appellants also fit to be set aside.

The Coram of Mr. Anil Choudhary, Member (Judicial) and Mr. Raju, Member (Technical) has held that “we find that the cause of action against these appellants also does not survive. In this view the matter, we set aside the impugned order-in-original against these appellants also and also set aside the penalty against all these appellants. Thus, the appeals are allowed with consequential benefits”.

Mr. Suhrit Bhatnagar, Advocate appeared for the appellant and Mr. Sanjay Kumar Singh, Authorised Representative appeared for the respondent.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.