In Excise Appeal No. 77731 of 2018 With Excise Appeal No. 75716 of 2018-ITAT-Imposition of penalties on both proprietorship firm and proprietor would amount to double penalty, which cannot be sustained in the eyes of the law: ITAT (Kolkata)
Member R. Muralidhar (Judicial) [21-03-2023]

Read order: Noor Mohd. & Brothers v. Commr. of CGST & Central Excise, Kolkata North Commissionerate

Chahat Varma

New Delhi, April 20, 2023: Following the decision of the Punjab and Haryana High Court in Vinod Kumar Gupta Vs. CCE [LQ/PunjHC/2012/1073] wherein it has been held that imposition of penalties, one on the proprietorship firm and second on the proprietor, cannot be sustained in the eyes of the law, the Kolkata bench of ITAT has set aside the penalty imposed on the partner of Noor Md. & Brothers.

In the present case, a penalty of Rs.2,09,704/- was imposed on the partnership firm in terms of Rule 25 (1)(c) of CER Rules, 2002 read with Section 11 AC of the Central Excise Act, 1944 and a personal penalty of Rs.2,09,704 was imposed on the partner, Mr. Moinuddin Ansari.

Partnership firm had also contested the penalty imposed under Section 11 AC for amount of Rs.2,09,704/-. The counsel had submitted that the Adjudicating Authority was bound to give an option of paying the penalty @ 25% if the duty with interest was paid within 30 days from the date of communication of the OIO. The Tribunal by placing reliance on CCE Ahmedabad Vs. Kalpesh Founders & Engineers, gave an option to the appellant to pay 25% of Rs.2,09,704/- as penalty.