1. The present appeal has been filed by M/s. A.V. Agro products limited being aggrieved of the Order in Original dated 6th May, 2010 as announced by Commissioner where penalty of Rs. 10,00,000/- has been imposed upon the present appellant under Section 112B of the Customs Act.

2. Facts relevant for the present purpose are that : As per the intelligence gathered about M/s. Pioneer Soap & Chemicals, to have been misusing the exemption extended vide Sl. No. 30 of Notification No. 21/2002 -CU by importing the crude palm oil (CPO) at concessional rate of customs duty and by diverting the same to open market instead of using the same for the given purpose. During investigations several co-noticees as mentioned in the show cause notice including the present appellant were found issuing the fake consignments/notice/bills/invoices to show sale of washing soap without actually manufacturing/selling washing soaps and some of the CPO was directed to open market by appellants mis-declaring as rice -bran oil. All of them were alleged to have wrongly availed the exemption and thus had wrongly paid the customs duty. The co-applicants including the present appellant were alleged to have abetted with the main appellant M/s. Pioneer Soap and Chemicals in his act of commission/omission by assisting him in publication of false documents, to show the consumption of CPO in the manufacture of soap which were neither manufactured nor cleared by them. A show cause notice dated 24.04.2007 was served upon 13 persons with appellant as one of them, Noticee No. 4 and M/s. Pioneer Soap & Chemicals being the main noticee proposing the imported CPO to be confiscated and for the penalty on all the noticees. Vide order under challenge, the said proposals were accepted. Proprietor Shri Lalit Goyal the main appellant alongwith other 6 six noticees including Mr. Mahesh Kumar, Sunil Goyal, Brij Mohan, M/s. HG Oil Carriers, Harjinder Singh and M/s. Lokpriya Traders filed an application under Section 127B of the Customs Act for settlement of the case arising out of the said show cause Notice No. 15/10/05/1061 dated 24.04.2007 vide order dated 24.02.2008 the said application was disposed of after imposing penalty on six of the applicants and without granting immunity from prosecution subject to payment of duty as imposed

3. Arguments of both the parties heard.

4. It is submitted on behalf of the appellant that the Settlement Commission has already settled the matter and once the main noticees case is settled, there is no reason for any proceeding to still continue against any of the co-noticee. Decision of Delhi High Court dated 03.11.2016 in the case of M/s. LESAGHBB (I) Ltd. & Ors v. Commissioner of Central Excise, (W.P.(C) 4819/1999 & the case of S.K. Colombowala v. CC : (2007) 220 ELT 492.

5. Department while rebutting these arguments has submitted that in fact the impugned show cause notice dated 24th April 2007 was issued to 13 noticees as mentioned therein and only 6 thereof had gone to Settlement Commission. No immunity from further prosecution was given even to said six applicant. Finally while relying upon the case of Mamta Garg v. Commissioner of Customs & Central Excise, Noida : 2018 (359) ELT 77 (Tri.-Del.), Department has prayed for appeal to be rejected.

6. After hearing and perusing the entire record, I am of the considered opinion as follows:-

7. 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-CU by importing the crude palm oil at concessional rate at Customs duty and diverting the same to open market instead of using the same for the given purpose.

8. The main beneficiary was the first applicant M/s. Pioneer Soap & Chemicals. No doubt vide order dated 24.02.2009 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 Revenue 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 Revenue to take action as deemed fit in respect of the other co-Noticees of the impugned 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 abetter or conspirator for the illegal act adjudicated against the other Noticees but they were found committing the offence of unauthorized transportation of the impugned crude oil no doubt with the sole intention of getting illegal benefit of Sl. No. 30 of Notification No. 21/2002-CU. 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 jurisprudents 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 committed 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 not to automatically get penalty set aside on the ground that the case of main Noticee has been settled.

9. 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 Noticees the appellants cannot be entitled for the blanket immunity. Otherwise also the immunity from prosecution has not been granted even to Mr. Lalit Goyal, the Proprietor of main Noticee M/s. Pioneer Soap and Chemicals. The penalty has simultaneously been imposed upon the remaining Noticees/applicants of 127B Customs Act. In addition, the Settlement Commissioner has granted liberty to the Revenue to take the appropriate action against the remaining Noticees i.e. the appellants herein. Hence, the benefit of KVS Scheme cannot suo moto be extended to the appellants. Appeal is accordingly, rejected.