Order Date – 08 August 2022

Facts – 

• The appellant, Mr. Bajrang Lal Agarwal, Director of M/s Shyam Sel & Power Ltd., was disallowed Cenvat Credit amounting to Rs.19,02,525/- and penalty of an equal amount was imposed on the noticee Company as well as also imposed upon the Director, Mr.Bajrang Lal Agarwal.
• The main Noticee, M/s Shyam Sel & Power Limited have settled the dispute under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and the Discharge Certificate of SVLDRS-4 to this effect has been issued to them for full and final settlement of Tax Dues under Section 127 of the Finance (No.2) Act, 1994 read with Rule 9 of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
• Aggrieved the Appellant filed an appeal.

Issue – 

• Whether the penalty imposed on the Director even though M/s Shyam Sel & Power Limited has already settled the dispute under the said Scheme is justifiable?

Order – 

• The Tribunal observed that since the main Noticee, M/s Shyam Sel & Power Limited has already settled the dispute under the said Scheme, the penalty imposed on the Director does not survive and therefore, there was no occasion for the Director to file any separate application on the same purposes. 
• They relied on case of P.B.Vyas Vs. Commissioner of Central Excise, Mumbai III (Tri.-Mumbai) in which it was held that insistence of payment of penalty by a co-noticee, when the main party has settled the issue under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, defeats the spirit of the scheme itself. 
• In view of the ratio of the above decision of this Tribunal, the penalty imposed on the Director, Mr.Bajrang Lal Agarwal being a conoticee, is set aside.