Supreme Court modifies CESTAT Order, Sets aside Penalty to the Extent of Rs. 25 Lakhs Imposed on Resort Directors [Read Judgement]

In the Interest of justice, the Supreme Court made a minor adjustment to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) order, which nullified the penalty of Rs. 25 lakhs imposed on the directors and employees of the resort.

The bench of Justice S. Ravindra Bhat and Justice Aravind Kumar have meticulously examined the appeals and reviewed the associated records.

The apex court stated that “ The interpretation favoured by the Members in the majority of the Customs, Excise and Service Tax Appellate Tribunal, holding that having regard to the facts of these cases, the fulfillment of export obligation certificate was not determinative, per se, cannot be sustained. However, having regard to the other factual findings, this Court is of the opinion that the larger interest of justice will be subserved if the impugned order is sustained except to the extent of the slight modification. No substantial question of law arises.”

The bench annulled the penalty imposed on the Directors/employees of the appellant-company to the extent of rs. 25 lakhs. Further stated that any remaining balance, if applicable, may be settled after accounting for amounts previously encashed through the Bank Guarantee and any payments made subsequently by the appellant company.

The Supreme Court clarified that this ruling applies specifically to the circumstances of these cases and is not intended to definitively resolve the rights of the appellants in any other ongoing proceedings. All rights and contentions in that regard are left open. Conclusively  the appeals are partially allowed, with the stipulated terms.

To Read the full text of the Order CLICK HERE

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