Personal Penalty on Directors Requires Proof of ‘Knowing Involvement’: CESTAT Quashes S. 78A Penalty

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Personal Penalty on Directors Requires Proof of ‘Knowing Involvement’: CESTAT Quashes S. 78A Penalty

Indirect Taxes

Published on

31/12/2025

By Mariya Paliwala

Personal Penalty on Directors Requires Proof of ‘Knowing Involvement’: CESTAT Quashes S. 78A Penalty

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The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a personal penalty of Rs. 1 lakh imposed on a former director under Section 78A of the Finance Act, 1994, holding that the mandatory legal requirements for fastening individual liability were not satisfied. The dispute arose from a show…

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Mariya Paliwala https://www.jurishour.in/

Mariya is the Senior Editor at Juris Hour. She has 7+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started her career as a freelance tax reporter in the leading online legal news companies.

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Personal Penalty on Directors Requires Proof of ‘Knowing Involvement’: CESTAT Quashes S. 78A Penalty

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