" 1 C/85235,85236,85579,85581,85582/2013 \n \nCUSTOMS, EXCISE & SERVICE TAX APPELLATE \nTRIBUNAL, MUMBAI \nREGIONAL BENCH \n \nCustoms Appeal No. 85235 of 2013 \n \n(Arising out of Order-in-Original No. 117/2012 dated 08.11.2012 \npassed by Commissioner of Customs (Imports), Nhava Sheva) \n \nShri Kaushal A. Shah \n \n \n \nAppellant \n3A, Avsar Bldg., 3rd floor, \n77/81, Kazi Sayed Street, \nMumbai 400 003. \n \n \n \n \n \n \n \n \nVs. \nCommr. of Cus. (Imp), Nhava Sheva Respondent \nJawaharlal Nehru Custom House, \nPost Uran, Dist. Raigad, \nSheva 400 707. \n \nWITH \nCustoms Appeal No. 85236 of 2013 \n \n(Arising out of Order-in-Original No. 117/2012 dated 08.11.2012 \npassed by Commissioner of Customs (Imports), Nhava Sheva) \n \nM/s. Riya Chemicals \n \n \n \nAppellant \n3A, Avsar Bldg., 3rd floor, \n77/81, Kazi Sayed Street, \nMumbai 400 003. \n \n \n \n \n \n \n \n \nVs. \nCommr. of Cus. (Imp), Nhava Sheva Respondent \nJawaharlal Nehru Custom House, \nPost Uran, Dist. Raigad, \nSheva 400 707. \nWITH \nCustoms Appeal No. 85579 of 2013 \n \n(Arising out of Order-in-Original No. 117/2012 dated 08.11.2012 \npassed by Commissioner of Customs (Imports), Nhava Sheva) \n \nM/s. Krishna Chemicals \n \n \n \nAppellant \n108, Anand Bldg., \n82/84, Kazi Sayed Street \nMumbai 400 003. \n \n \n \n \n \n \n \n \nVs. \nCommr. of Cus. (Imp), Nhava Sheva Respondent \nJawaharlal Nehru Custom House, \nPost Uran, Dist. Raigad, \nSheva 400 707. \nWITH \nCustoms Appeal No. 85581 of 2013 \n \n(Arising out of Order-in-Original No. 117/2012 dated 08.11.2012 \npassed by Commissioner of Customs (Imports), Nhava Sheva) \n\n 2 C/85235,85236,85579,85581,85582/2013 \n \nShri Jiten Shah \n \n \n \n Appellant \n108, Anand Bldg., \n82/84, Kazi Sayed Street \nMumbai 400 003. \n \n \n \n \n \n \n \n \nVs. \nCommr. of Cus. (Imp), Nhava Sheva Respondent \nJawaharlal Nehru Custom House, \nPost Uran, Dist. Raigad, \nSheva 400 707. \nAND \nCustoms Appeal No. 85582 of 2013 \n \n(Arising out of Order-in-Original No. 117/2012 dated 08.11.2012 \npassed by Commissioner of Customs (Imports), Nhava Sheva) \n \nM/s. Popular Chemicals & Co. \n \n \nAppellant \n108, Anand Bldg., \n82/84, Kazi Sayed Street \nMumbai 400 003. \n \n \n \n \n \n \n \n \nVs. \nCommr. of Cus. (Imp), Nhava Sheva Respondent \nJawaharlal Nehru Custom House, \nPost Uran, Dist. Raigad, \nSheva 400 707. \n \nAppearance: \nShri Rohan Balani, Advocate, for the Appellant \nShri \nA.P. \nKothari, \nAdditional \nCommissioner, \nAuthorised \nRepresentative for the Respondent \n \nCORAM: \nHon’ble Mr. S.K. Mohanty, Member (Judicial) \nHon’ble Mr. Sanjiv Srivastava, Member (Technical) \n \n \nFINAL ORDER NO. A/86704-86708/2019 \n \nDate of Hearing: 18.06.2019 \nDate of Decision: 24.09.2019 \n \n \nPER: SANJIV SRIVASTAVA \n \nThese appeals are directed against the order in \noriginal no.117/2012 dated 08.11.2012 of Commissioner \nCustoms (Import), Nhava Sheva. By the impugned order \nCommissioner has held as follows: \ni. \n\"I impose penalty of Rs 9,00,000/- (Rupees Nine \nLakhs Only) upon M/s Popular Chemicals under \nSection 112(a) of Customs Act, 1962. \n\n 3 C/85235,85236,85579,85581,85582/2013 \n \nii. \nI impose penalty of Rs 10,00,000/- (Rupees Ten \nLakhs Only) upon M/s Riya Chemicals under Section \n112(a) of Customs Act, 1962. \niii. \nI impose penalty of Rs 2,50,000/- (Rupees Two \nLakhs \nFifty \nThousand \nOnly) \nupon \nM/s \nShlok \nChemicals under Section 112(a) of Customs Act, \n1962. \niv. \nI impose penalty of Rs 2,00,000/- (Rupees Two \nLakhs Only) upon M/s Rose Chemicals under Section \n112(a) of Customs Act, 1962. \nv. \nI impose penalty of Rs 1,00,000/- (Rupees One \nLakhs Only) upon M/s Krishna Chemicals under \nSection 112(a) of Customs Act, 1962. \nvi. \nSince penalty has been under Section 112(a) of \nCustoms \nAct, \n1962 \nupon \nabove \nmentioned \nproprietary firms, I refrain from imposing penalty \nunder Section 112(a) ibid. I also do not impose \npenalty under Section 114A ibid upon firms \nvii. I impose penalty of Rs 25,00,000/- (Rupees Twenty \nFive Lakhs Only) each upon Shri Jiten Shah and \nKaushal Shah respectively under Section 114AA ibid. \nviii. I refrain from imposing penalty under Section \n112(a)/ 114AA ibid upon M/s Vipul Pranal Doshi and \nM/s Standard Shipping Agency CHA's . \nix. \nThis order is passed without prejudice to any other \naction that were being taken under this or any other \nAct for time being in force.\" \n1.2 \nHere we are concerned with the appeals filed by Shri \nKaushal A Shah, Shri Jiten Shah, M/s Riya Chemicals, M/s \nPopular Chemicals & Co and M/s Krishna Chemicals. \n2.1 \nAppellants had imported certain goods and sold the \nsame on high seas to M/s R R Enterprises and M/s R \nNandlal & Sons by misdeclaring the value. Thus by mis-\ndeclaring the value, appellants had abetted the said two \n\n 4 C/85235,85236,85579,85581,85582/2013 \n \nfirms mis-declare the value and short pay the duty. In his \nstatement recorded under Section 108, Shri Jiten Shah has \nadmitted the misdeclaration. \n2.2 \nA show cause notice was issued to this importers \n(filing the Bill of Entry) and the appellants. The importers \nwho filed the Bill of Entry admitted and paid the differential \nduty and got the matter settled through the Settlement \nCommission. \n2.3 \nCommissioner proceeded to adjudicate the case \nagainst the remaining noticees and for act of abetting the \nact of misdeclaration for which goods were liable to \nconfiscation, imposed penalty under section 112(a) of \nCustoms Act, 1962 and also imposed penalty under \nSection 114AA on the persons responsible for filing or \ncausing the documents to be filed mis declaring the value. \n2.4 \nAggrieved by the impugned orders appellants have \npreferred these appeal. \n3.1 \nWe have heard Shri Anil Balani, Advocate for the \nAppellant and Shri A.P. Kothari, Additional Commissioner, \nAuthorized Representative for the revenue \n3.2 \nArguing for the appellants learned counsel submitted \nthat- \n• Section 111(d) and 111(m) could not have been \ninvoked \nagainst \nthem \nas \nthe \ngoods \nunder \nimportation were neither prohibited goods, nor were \nmisdeclared by them. In fact appellants had not even \nfiled the Bill of Entry in respect of the imported \ngoods. \n• Just because person filing the Bill of Entry has \nsettled the issue and has admitted and paid the \ndifferential duty charge of undervaluation do not get \nestablished against them. \n• Penalty in case of undervaluation could not have \nbeen imposed without referring to Customs Valuation \n(Determination of Price Of Imported Goods) Rules, \n2007 \n\n 5 C/85235,85236,85579,85581,85582/2013 \n \n• Penalty under Section 114AA is not sustainable, as \nthis section is applicable only in cases of fraudulent \nexports to avail the benefit of export promotion \nscheme \n(Twenty \nSeventh \nReport \nof \nStanding \nCommittee \non \nFinance \non \nthe \nTaxation \nLaw \n(Amendment) Bill, 2005. This view has been \nexpressed by the Tribunal in case of Bosch Chasis \nSystems India Ltd [2015 (325) ELT 372 (T)], and in \nPrincipal Commissioner/ Commissioner orders as \nfollows: \n• Order in Original No 190/2016-17/CC/NS-I/JNCH \ndtd 9.03.2017. \n• Order in Original No 78/2012/CAC/CC(I)/AB/VI \ndtd 3.12.2012. \n• In the following decisions it has been settled that \nonce the main parties settle the case penalty cannot \nbe imposed on the co-noticee's- \n• S K Colombowala [2007 (220) ELT 492 (T)] \n• Windoors (India) [2009 (246) ELT 345 (T)] \n• Mukesh Garg [2012 (278) ELT 303 (T)] \n• Vijay R Bohra [2010 (260) ELT 290 (T)] \n• Pearl Polymers Ltd [2008 (226) ELT 566 (T)] \n• Radiant Silk Mills (P) Ltd [2013 (288) ELT 311 \n(T)] \n• Virender Bansal [2015 (317) ELT 796 (T)] \n• Him Logistics [2017 (49) ELT 121 (T)] \n• It is also settled law that the penalties imposed on \nco-noticee could not have exceeded the penalty \nimposed on main noticee. {Shitala Prasad Sharma \n[2005 (183) ELT 21 (T)]} \n\n 6 C/85235,85236,85579,85581,85582/2013 \n \n• Also penalty could not have been imposed on the \nfirm as well as proprietor separately. \n3.3 \nArguing \nfor \nthe \nrevenue \nlearned \nauthorized \nrepresentative submitted- \n• Shri Jiten Shah who is proprietor of M/s Popular \nChemicals and power of attorney holder for M/s \nKrishna Chemicals have in his statement admitted \nabout mis-declaring the value, and has thus abetted \nin the mis declaration of value. Similarly Shri \nKaushal A Shah has admitted about misdeclaring the \nvalue. \n• The issue in respect of mis declaration of value has \nbeen admitted by the importers (person filing the \nB/E) as they have admitted and got the matter \nsettled through settlement commission. \n• Since the charges and role of appellants in the act of \nmisdeclaring the goods has been admitted the \npenalties imposed on the appellants are justified. \n• Tribunal has in case Mamta Garg [2018 (359) ELT 77 \n(T)] held that penalties could have been imposed on \nthe persons to whom the notice has been issued \neven if the persons on whom demand has been \nmade settles the issue by approaching settlement \ncommission. \n4.1 \nWe \nhave \nconsidered \nthe \nimpugned \norder, \nsubmissions made in the appeals and during the course of \nargument of appeals. \n4.2 \nOnce the person who has filed the Bill of Entry has \nadmitted and paid the differential duty on account of \nmisdecalaration of value, the value as determined in the \nshow cause notice and by the settlement commission will \nbecome the value under section 14 of the Customs Act, \n1962. We do not find any merits in the submissions of the \nAppellant that the Commissioner should have again \nconsidered and re-determined the value, as per the \n\n 7 C/85235,85236,85579,85581,85582/2013 \n \nCustoms Valuation (Determination of Price of Imported \nGoods) Rules, 2007. Once the value has been found \ndeclared the goods become liable for confiscation under \nSection 111(m) of the Customs Act, 1962 and the person \nmisdeclaring or abetting in such misdeclaration is liable to \npenalty under section 112(a). \n4.3 \nAppellants Shri Kaushal A Shah and Shri Jiten Shah \nare responsible for issuance of the invoice misdeclaring the \nvalue. This invoice was the document which was the basis \nfor filling the B/E misdeclaring the value of imported \ngoods. Once it is established that Shri Kaushal A Shah and \nShri Jiten Shah were responsible for filing or causing to file \nthe documents misdeclaring the value of goods, section \n114AA gets attracted. \n4.4 \nWe are also not in agreement with the submissions \nmade by the appellant by referring to Twenty Seventh \nReport of Standing Committee on Finance on The Taxation \nLaw (Amendment) Bill, 2007, to state that Section 114AA \nof Customs Act, 1962 will apply only to the case of \nfraudulent exports to avail the benefit of export promotion \nscheme. Hon'ble Supreme Court has in case of Doypack \nSystems Pvt Ltd. [1988 SCC (2) 299] held as follows: \n\"In our opinion Sections 3 and 4 of the Act interpreted \neither on their own language or along with sections 7 and \n8, are not ambiguous; so documents are not relevant. It \nwas further urged, that even if to construe the language is \nnot clear and there is need to resort to aids of \nconstruction, it is clear that such aids can be either internal \nor external. \nInternal aids of construction are definitions, exceptions, \nexplanations, \nfictions, \ndeeming \nprovisions, \nheadings, \nmarginal notes, preamble, provisos, punctuations, saving \nclauses, non-obstante clauses etc. The notings in the files \nof various officials do not fall in the category of internal \naids for consideration. Dictionaries, earlier acts, history of \nlegislation, \nParliamentary \nhistory, \nparliamentary \nproceedings, state of law as it existed when the Act was \n\n 8 C/85235,85236,85579,85581,85582/2013 \n \npassed, the mischief sought to be suppressed and the \nremedy sought to be advanced by the Act are external \naids. Documents which have been required to be produced \ndo not, in our view fall within the category of external aids \nas \nindicated. \nHaving \nconsidered \nthe \nfacts \nand \ncircumstances of the case, we are unable to accept the \nprayer of the petitioner to direct disclosure and production \nof the documents sought for. In our opinion, the language \nused in section 4 of the Act, is clear enough read with \nsection 3 of the Act. We have set out the provisions of the \nsaid two sections. Section 3 states that \"on the appointed \nday every textile undertaking and the right, title and \ninterest of the Company in relation to every textile \nundertaking shall stand transferred to and shall vest in the \nCentral Government\". Section 4 says that \"section 3 shall \nbe deemed to include all assets, leaseholds, powers, \nauthorities, privileges and all properties, movable and \nimmovable ... pertaining to the textile undertakings and all \nother rights and interests in or arising out of such \nproperty\". \nFrancis Bennion in \"Statutory Interpretation 1984 Edition \npage 526 para 238 states that Hansard reports, and other \nreports of parliamentary proceedings on the Bill which \nbecame the Act in question, are of obvious relevance to its \nmeaning. They are often of doubtful reliability however. \n(emphasis supplied) The documents in question which are \nsought for do not relate to the enacting history or any past \nenactment or the present enactment. The notings made in \nvarious Departments at various levels by the officers \nnamely, the Under Secretary, Deputy Secretary, Joint \nSecretary; Secretary etc., whatever their view might be, is \nnot the view of the Cabinet. The ultimate decision is taken \nby the Cabinet. So the notings cannot and are not guides \nas to what decision the Cabinet took. See for example the \nTask \nForce \nreport \nreferred \nto \nin \nNational \nTextile \nCorporation Ltd. v. Sitaram Mills Ltd. & others (supra). \nThis Task Force Report demonstrated the irrelevancy of the \n\n 9 C/85235,85236,85579,85581,85582/2013 \n \ndocuments summoned to be produced. The Task Force \nReport manifested that certain mills were viable. But from \nthe circumstance under which managements of these mills \nwere taken over, it was clear that the Cabinet had taken \nthe decision contrary to what was contained in the Task \nForce Report. But it appears that the decision of the \nCabinet was different from the views of the Officers at \nvarious levels. As Bennion has stated at para 261 (page \n560 of the same book) that in interpreting an enactment a \ntwo stage approach is necessary. Here there is no real \ndoubt on an informed basis as we shall indicate hereafter \nabout the real meaning of the enactment. There is \ntherefore no question of resolving the doubt. The second \nstage does not arise here. \nThis Court in Sanjeev Coke Manufacturing Company v. \nBharat Coking Coal Ltd. and another (supra) held that no \none may speak for the Parliament and Parliament is never \nbefore the Court. After the Parliament has said what it \nintends to say, only the Court may say what the \nParliament meant to say. None else. See also in this \nconnection Dr. (Mrs.) Sushma Sharma and others v. State \nof Rajasthan and others (supra). The objects and purposes \nof the person who initiated the Bill are not admissible as \naids to construction since it is impossible to contend that \nsuch purposes in the minds of some officials of the \nGovernment before the matter is discussed by the Cabinet, \nwould at all be relevant. See in this connection State of \nWest Bengal v. Union of India (supra) where this Court \nreiterated that the Statement of Objects and Reasons, \naccompanying when introduced in the Parliament cannot \nbe used to determine the true meaning and effect of the \nsubstantive provisions of the statute. Such statement \ncannot be used to show that the legislature did not intend \nto take over any particular property. See also The Central \nBank of India v. Their Workmen (supra). \nIt has to be reiterated, however that the objects and \nreasons of the Act should be taken into consideration in \n\n 10 C/85235,85236,85579,85581,85582/2013 \n \ninterpreting the provisions of the statute in case of doubt. \nThis is the effect of the decision of this Court in K.P. \nVerghese v. The Income tax Officer, Ernakulam and \nanother, [1982] 1 S.C.R. 629, where this Court reiterated \nthat the speech made by the Minister over of the Bill \nexplaining the reason for the introduction of the Bill could \ncertainly be referred to for the purpose of ascertaining the \nmischief sought to be remedied by the legislation and the \nobject and purpose for which the legislation was enacted. \nIt has been reiterated that interpretation of a statute being \nan exercise in the ascertainment of meaning, everything \nwhich is logically relevant should be admissible. See in this \nconnection the observations of this Court in Chern Taong \nShang & anr. etc. etc. v. Commander S.D. Baijal & Ors., \nJ.T. 1988 1 S.C. 202. The documents now sought for by \nthe petitioner do not fall within this category. It is neither \nthe object and scheme of the enactment nor the language \nused therein, that is sought for in the instant case. It is \ncertainly relevant to know the mischief that was intended \nto be remedied. But in the documents in question which \nthe petitioner is seeking no such correlation has been \nestablished. These are, therefore, not relevant. We \nreiterate that no officer of the Department can speak for \nthe Parliament even after the Act has been passed. This \nCourt has to interpret the Act on the basis of informed \nbasis by applying external and internal aids if the language \nis ambiguous. In the words of Lord Scarman \"We are to be \ngoverned \nnot \nby \nParliament's \nintentions \nbut \nby \nParliament's \nenactments\". \nSee \nCross \n\"Statutory \nInterpretation\" 2nd Edition page 22. Blackstone in his \n\"Commentaries on the Laws of England\" (Facsimile of 1st \nedn. 1765, University of Chicago Press 1979) Vol. 1 at 59 \nsuggests \"The fairest and most rational method to \ninterpret the will of the legislator is by exploring his \nintention at the time when the law was made, by signs \nmost natural and probable. And these signs are the words, \nthe \ncontext, \nthe \nsubject \nmatter, \nthe \neffect \nand \n\n 11 C/85235,85236,85579,85581,85582/2013 \n \nconsequence, or the spirit and reason of the law.\" The \ndocuments whose production is sought for are none of \nthese. So in our opinion these are not relevant. We must \nfurther reiterate that the Members of Parliament had \nbefore them only the Bill. The notings of the various \nofficials in the files were not before the Parliament. \nTherefore members could not be attributed with the \nknowledge of the notings in the files. Therefore, the \nnotings made by the officials are not relevant. In this \nconnection reliance may be placed on the principles of \ninterpretation as enunciated by the Federal Court in \nAuckland Jute Co. Ltd. v. Tulsi Chandra Goswami, [1949] \nF.C.R. 201 at 244. It is trite saying that the interpreter of \nthe statute must take note of the well known historical \nfacts. In conventional language the interpreter must put \nhimself in the arm chair of those who were passing the Act \ni.e. the Members of the Parliament. It is the collective will \nof the Parliament with which we are concerned. See in this \nconnection the observations of the Federal Court in \nRM.AR.AR.R.M.AR. Umayhal Achi v. Lakshmi Achi and \nothers, [1945] F.C.R. 1. We are therefore, of the opinion \nthat the documents sought for are not relevant for the \npurpose for which they were sought for. In this case we \nare concerned only with the construction of the statute to \ndetermine whether the shares vested in the Government \nor \nnot. \nAs \nLord \nReid \nhas \nsaid \nin \nBlack-Clawson \nInternational Ltd. v. Papierwerke Waldhof Achaffenburg A \nG, [1975] A.C. 591 at 613 \"We often say that we are \nlooking for the intention of Parliament, but that is not quite \naccurate. We are seeking the meaning of the words which \nParliament used. We are seeking not what Parliament \nmeant but the true meaning of what they said.\" See in this \nconnection \nthe \ndiscussion \nin \nCross \nStatutory \nInterpretation-2nd Edition, pages 20-30.\" \nThus in our view when the wordings of the statue are plain \nand unambiguous, courts and tribunal could not have \ntaken and contrary view, by relying on the external aids as \n\n 12 C/85235,85236,85579,85581,85582/2013 \n \nhave been sought to be relied upon by the appellants. In \nour view the decisions of tribunal and Commissioner \nhaving failed to consider the decision of Apex Court as \nreferred above are per-incuariam and cannot be binding \nprecedent. Apart from the legal submission made by \nplacing the reliance on the 27th Report, appellant have not \nbeen able to counter the finding of facts recorded by the \nCommissioner for imposing penalty under Section 114AA. \n4.5 \nWe are also not in agreement with the submissions \nmade by the appellants relying on the various decisions of \ntribunal to state that penalties could not have been \nimposed on the co-noticee when the main appellant has \nsettled the issue. In case of Mamta Garg, referred to by \nthe authorized representative, tribunal has by majority \nview laid down the law as follows: \n“32. To begin with, I note that the Member (J) as well as \nld. Counsel for the appellants heavily relied on the decision \nof the Tribunal in S.K. Colombowala (supra). In the said \ncase, the Tribunal was examining the liability to penalty of \nco- noticees when the main notice settled the case before \nthe Settlement Commission. The issue involved was that \nthe main notice was in possession of advance licence for \nduty free import of goods. The broker dealing with advance \nlicence misrepresented to D.G.F.T. and thereafter huge \nduty free imports were made resulting in loss of revenue. \nWhen the proceedings were initiated, the main party along \nwith Director approached the Settlement Commission and \ngot immunity from penalty and prosecution. The Original \nAuthority imposed penalties on the other noticees. It is to \nbe noted that the case dealt with was one composite \nfraudulent act of misusing advance licence with fraudulent \nintent, in which certain individuals and CHA and its \nDirector were also imposed with penalty. The Tribunal in \nS.K. Colombowala (supra) relied on the decision of the \nHon’ble Supreme Court in Union of India v. Onkar S. \nKanwar - 2002 (145) E.L.T. 266 (S.C.). \n\n 13 C/85235,85236,85579,85581,85582/2013 \n \n33. I have perused the said decision of the Hon’ble \nSupreme Court, para-14 of which clearly shows that the \nHon’ble Supreme Court was specifically dealing with KVSS \nScheme read with 8-12-1998 order of the Government and \nclarificatory note dated 16-12-1998 :- \nWe have heard the parties. In our view, a “14. reading of \nthe Kar Vivad Samadhan Scheme (Removal of Difficulties) \nOrder shows that where a declaration had been made in \nrespect of a tax arrear and where in respect of the same \nmatter a show cause notice had also been issued to any \nother person, then the settlement in favour of the declarant \nhas to be deemed to be full and final in respect of other \npersons on whom show cause notices had been issued. It is \nsettled law that when an appeal is pending there is no \nfinality to the proceedings. The proceedings are then \ndeemed to be continuing. Undoubtedly, at one place the \nKar Vivad Samadhan Scheme (Removal of Difficulties) \nOrder seems does state that the show cause notice should \nbe pending adjudication. However, the same order also \ntalks of the show cause notice being in respect of same \nmatter on which the show cause notice has been issued to \nthe main declarant. Then the order provides that a \nsettlement in favour of the declarant will be deemed to be \nfull and final in respect of other persons also. This order \nhas to be read as a whole. If read as a whole, it is clear \nthat a settlement by the main declarant is to operate as full \nand final settlement in respect of all other persons on \nwhom show cause notice was issued in respect of the same \nmatter. Thus read as a whole the words “pending \nadjudication” cannot be read to exclude cases where the \nproceedings are still pending in appeal. Even otherwise the \norder has to be read along with the Kar Vivad Samadhan \nScheme. Under the Kar Vivad Samadhan Scheme a party \ncan file a declaration so long as the proceedings are \npending. Thus, even though the show cause notice may \nhave been adjudicated upon and an appeal is pending a \nparty could still take the benefit of the Kar Vivad Samadhan \nScheme and file a declaration. The object of the Kar Vivad \nSamadhan Scheme (Removal of Difficulties) Order is to \ngive benefit of a settlement by the main party (i.e. the \n\n 14 C/85235,85236,85579,85581,85582/2013 \n \nCompany in this case) to all other co-noticees. This being \nthe object a classification, restricting the benefit only to \ncases where the show cause notice is pending adjudication, \nwould be unreasonable. If read in this manner the order \nwould be discriminatory. An interpretation which leads to \ndiscrimination must be avoided. An interpretation, as \nsuggested by Mr. Ganesh, would also be against the object \nof the Kar Vivad Samadhan Scheme (Removal of \nDifficulties) Order. It is therefore not possible to accept the \nsubmissions of Mr. Ganesh. In our view the reasoning given \nby the High Court of Kerala is correct and needs to be \nupheld.” \nIt is apparent that the KVSS scheme and the order issued \nby the Government clearly provided for settlement by the \nmain declarant to operate as full and final settlement in \nrespect of all other persons, on whom show cause notice \nwas issued in respect of the same matter. Reliance on the \nsaid decision of the Hon’ble Supreme Court to hold that the \nsettlement of case by the main noticee before the \nSettlement Commission in terms of Section 127 (J) of \nCustoms Act, 1962 will conclude that the proceeding \nagainst all co-noticees is not legally sustainable. The \nTribunal emphasised that the expression “case” refers to \nany proceedings under Customs Act or any other Act for \nassessment and collection of customs duty. \n34. First of all, the reliance placed by the Tribunal in S.K. \nColombowala (supra) on the decision of the Hon’ble \nSupreme Court in Onkar S. Kanwar (supra) is not \nappropriate as the issue dealt with is different in scope and \napplication. The same is very clear from the findings of the \nHon’ble Supreme Court reproduced above. Even otherwise, \nthe term “co-noticee” cannot be interpreted in such a \nmanner that all the persons, who received same show \ncause notice in a combined investigation, will automatically \ndeemed to have been involved in one single case only. \nSuch inference will be factually incorrect in many cases. It \nis not in-frequent that the investigations are conducted \nagainst many assessees and other parties in a combined \n\n 15 C/85235,85236,85579,85581,85582/2013 \n \noperation involving same or different modus operandi. For \nconvenience, a single show cause notice is issued to \nvarious assessees and other connected parties. If one such \nassessee approached Settlement Commission and settled \nthe case, it does not mean that simply because of that \nvarious other assessees involved in the same investigation \nproceedings and issued with said notices will automatically \nget immunity. In this context, the term “co-noticee” has to \nbe examined for the legal implications - are they party to \nthe same single offending act or they are party to distinct \noffending acts, which can be penalized independently \nwithout even reference to the other person’s role. \nExamined in this angle, it is apparent that no summary \nconclusion that all co-noticees of a show cause-cum-\ndemand notices will get immunity from penalty, if one of \nthem gets the matter settled before the Settlement \nCommission. No such legal provisions are available in the \nCentral Excise Act, 1944 or the rules made thereunder. In \nother words, no blanket immunity to all the noticees will \nautomatically come into operation when one of the \nnoticees, even if he is the main noticee, approaches and \ngets the matter settled before the Settlement Commission. \nIt is necessary to examine the role of each of the noticees \nto appreciate whether they had committed an act, which, \nindependently, is liable for penal action. If their act is \ndirectly linked to the main offence as part and parcel of the \nsame offence or they are involved only in abetting the \nmain offence, then they may be covered for immunity \nbased on the ratio followed in S.K. Colombowala (supra). \nHowever, on examination, if it is found that any of the co-\nnoticees, \nwho \ndid \nnot \napproach \nthe \nSettlement \nCommission, has committed an offence distinct and is \nliable for penalty to that offence, then automatic immunity \ncannot be extended to such co-noticee. Here, it may not \nbe out of place to mention that the appellants in the \npresent case were charged with offence of non-registration \nwith the department, issuing documents showing duty \n\n 16 C/85235,85236,85579,85581,85582/2013 \n \npayment without actual manufacture and clearance of \ngoods, etc. Prima facie, these acts were separate and \ndistinct \nliable \nfor \npenal \nconsequences. \nAccordingly, \nirrespective of the main noticee, who availed irregular \nCenvat \ncredit, \ngetting \nimmunity \nfrom \nSettlement \nCommission, the appellants herein cannot automatically \nget their penalty set aside on that ground alone. The \nmerits of the case against the appellants are to be \nexamined separately. \n35. Section 32E of the Central Excise Act, 1944 deals \nwith application for settlement of cases before the \nSettlement Commission. Section 31(c) defines the scope of \nterm “case” which means any proceedings under this Act \nor any other Act for the levy, assessment and collection of \nexcise duty pending before an Adjudicating Authority on \nthe date, on which application under sub-Section (1) of \nSection 32E is made. As already noted, that the \nproceedings against the appellants are for imposing \npenalties for various contraventions of the provisions of \nCentral Excise Law. It is not for assessment of duty \npayable by them. In other words, without there being a \ncase of any short payment or non-payment by the main \nnoticee in the present case, a case against the appellant \nwill stand on its own, based on the allegations made. The \nmerit of the allegations are to be decided in these appeals. \nTo say that all the allegations against various parties in a \nsingle notice will abate once the main party gets matter \nsettled, is not applicable in cases where there are distinct \nviolations alleged for different noticees, though the \ninvestigation may be common. A reference can be made to \nthe decision of the Hon’ble Supreme Court in the case of \nS.P. Chengalvaraya Naidu v. Jagannath and Others \nreported as (1994) 1 Supreme Court Cases 1 :- \n“The principle of “finality of litigation” cannot be pressed to \nthe extent of such an absurdity that it becomes an engine \nof fraud in the hands of dishonest litigants. The courts of \nlaw are meant for importing justice between the parties. \n\n 17 C/85235,85236,85579,85581,85582/2013 \n \nOne who comes to the court, must come with clean hands. \nWe are constrained to say that more often than not, \nprocess of the court is being abused. Property-grabbers, \ntax-evaders, bank-loan-dodgers and other unscrupulous \npersons from all walks of life find the court-process a \nconvenient lever to retain the illegal gains indefinitely. We \nhave no hesitation to say that a person, whose case is \nbased on falsehood, has no right to approach the court. He \ncan be summarily thrown out at any stage of the litigation.” \n36. The Hon’ble Bombay High Court in Yogesh Korani - \n2003 (159) E.L.T. 3 (Bombay), as affirmed by the Hon’ble \nSupreme Court reported in 2004 (163) E.L.T. A50 (S.C.), \nheld that when the penalty was levied on the petitioner \nbased on the independent and distinct causes of action \nthen they cannot be considered on par with the main \nnoticee. The reliance placed by the ld. Counsel on S.K. \nColombowala (supra) and various other decisions, which \nfollowed the same, can be distinguished by examining the \nallegations in notice and role of each person, who was \nserved with the notice. If the cause of action and the \noffence involved is distinct and can be treated for penal \naction independently, then no immunity will be extended \nautomatically to such co-noticee even if the main assessee \ngets the matter settled before the Settlement Commission. \n37. Ld. Counsel also submits, briefly, regarding non-\nliability of the appellant for penalty on merits as already \nnoted earlier in this order. Only the legal issue regarding \nimmunity available to the co-noticee (here, “the four \nappellants”) has been examined in the present reference \nas there is no decision on merit recorded by the Division \nBench.” \nThis decision has been followed by the tribunal in case of A \nV Agro Products Ltd [2018-TIOL-2015-CESTAT-Del]. \n \n4.6 \nIt is not even the case in the adjudication order that \nthe penalties for the same offence and under the same \nprovision has been imposed upon the proprietor and \nproprietorship concerns. The adjudication order itself \n\n 18 C/85235,85236,85579,85581,85582/2013 \n \nrefrains from imposing penalty under Section 112(a), on \nthe proprietors as penalties under the said section have \nbeen imposed on proprietorship firms. \n5.1 \nIn view of the discussions as above we do not find \nany merits in the appeals filed by the appellants and \ndismiss the same. \n(Order pronounced in the open court on 24.09.2019) \n \n \n \n(S.K. Mohanty) \nMember (Judicial) \n \n \n \n \n \n (Sanjiv Srivastava) \nMember (Technical) \n \n tvu \n"