Page 281 - ELT_15th July 2020_Vol 373_Part 2

2020 ] A.V. AGRO PRODUCTS LTD. v. COMMR. OF CUS., C. EX. & CGST, NEW DELHI 263

that there has been ample evidence against the appellant to have
sufficient knowledge about no washing soap to ever being manufac-
tured from this imported CPO by M/s. Pioneer Soap & Chemicals,
nor there has been any purchase by the present appellant of the
soap. All documents of transport have been proved to be forged.
Hence, the penalties have rightly been imposed upon the appel-
lants. Justifying the order under challenge the appeal in hand is
prayed to be dismissed.
5. After hearing parties and perusal of entire records my opinion to the
respective arguments is as follows :
A. Immunity to the appellants due to the order of Settlement Commissioner in
favour of the main noticee :
Show cause notice bearing No. 15.10.50 1062, dated 24th April, 2007 was
issued to 13 Noticees alleging the misuse of the exemption extended vide Sl. No.
30 of Notification No. 21/2002-Cus. by importing the crude palm oil at conces-
sional rate at Customs duty and diverting the same to open market instead of
using the same for the given purpose.
The main beneficiary was the first applicant M/s. Pioneer Soap & Chem-
icals. No doubt vide order dated 24-2-2009 the application of Noticee. Sl. No. 1, 6,
5, 8, 10 & 13 of the show cause notice under Section 127B of the Customs Act,
1962 was disposed of thereby imposing penalty upon 6 of the said applicants to
the extent as mentioned in the said order. The argument put forth by the Reve-
nue with respect to para 14 of the said order is perused as correct. A perusal of
that order dated 24th February, 2009 shows that penalty was imposed upon six
of the applicants and the Settlement Commission has given liberty to the Reve-
nue to take action as deemed fit in respect of the other co-noticees of the im-
pugned show cause notice. Further, perusal also shows that Noticees No. 7, 9, 11
& 12 of the show cause notice were also found to be fake persons existing in the
fake documents prepared at the instance of the main Noticee. The remaining
three Noticees i.e. at Sl. No. 2, 3 and 4 are the appellant herein. It is observed that
three of them have not merely been found the abettor or conspirator for the ille-
gal act adjudicated against the other Noticees but they were found committing
the offence of unauthorized transportation of the impugned crude oil with the
sole intention of getting illegal benefit of Sl. No. 30 of Notification No. 21/2002-
Cus.
No doubt the case law relied upon by the appellants holds good that
once the immunity from penalty has been issued against the main Noticee by the
Settlement Commission, the co-noticees enjoy the blanket immunity if the matter
is settled under KVS Scheme. But this is also a settled principle of jurisprudence
that merits of the case against the co-noticees have to be examined separately and
if and only if the co-noticees are found to commit the same offence as that com-
mitted by the main Noticee, the Settlement mechanism provides for settlement of
entire case as a whole. Tribunal, Delhi has clarified the situation further in Mamta
Garg (supra) case that where the act of Noticees is separately and distinctly liable
for penal consequences, the co-noticee are not to automatically get penalty set
aside on the ground that the case of main Noticee has been settled by the Settle-
ment Commission.
As already observed above, the act committed by three of the present
appellants is an act in addition to that as were committed by the remaining
EXCISE LAW TIMES  15th July 2020  281