Custom, Excise & Service Tax TribunalNew Sharada Industries vs Commissioner Of Central Excise P.B. No. ... on 30 June, 2016CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
BANGALORE

Appeal(s) Involved:

E/487/2007-DB 

[Arising out of Order-in-Original No. 02/2007 dated 30/03/2007 passed by the Commissioner of Central Excise, Bangalore]

For approval and signature:

HON'BLE SHRI S.S GARG, JUDICIAL MEMBER
HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBER

1	Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?	No
2	Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?	Yes
3	Whether Their Lordships wish to see the fair copy of the Order?	Seen
4	Whether Order is to be circulated to the Departmental authorities?	Yes

New Sharada Industries
No. 5876, By-pass Road,
Nelamangala, Bangalore  562 123	Appellant(s)
	Versus	

Commissioner of Central Excise P.B. No. 5400, C.R. Building, Queens Road, 
Bangalore  560 001
Karnataka	Respondent(s)Appearance:Shri Anirudha, Advocate
#152, Race Course Road,
Bangalore  560 001	For the Appellant

Shri Pakshi Rajan, AR	
For the Respondent

Date of Hearing: 08/06/2016
Date of Decision: 30/06/2016
CORAM:HON'BLE SHRI S.S GARG, JUDICIAL MEMBER
HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBERFinal Order No. 20500/ 2016Per: S.S GARG 	


	The present appeal is directed against the order of the Commissioner dated 30.03.2007 vide which the learned Commissioner confirmed the demand against M/s. New Sharada Industries, the appellant. Briefly the facts of the present case are that the appellant is a proprietorship concern manufacturing flush doors, plywood and block boards etc classifiable under Chapter 44 of the Central Excise Tariff. Based on the information that the assessee was evading payment of duty by resorting to under-invoicing and clandestine removal of excisable goods manufactured and sold by them, the officers of the DGCEI, Bangalore conducted searches at their factory cum office and premises of their dealers on 19th September 2004 resulting in seizure of incriminating records/documents/CPUs etc and investigation was conducted and thereafter a show-cause notice was issued to the appellant alleging the removal of goods clandestinely and also indulging in undervaluation of excisable goods. The appellant rebutted the allegations in the show-cause notice by filing reply and after hearing both parties, the learned Commissioner confirmed the demand of central excise duty of Rs. 58,97,063/- (Rupees Fifty Eight Lakhs Ninety Seven Thousand and Sixty Three only) being the duty on the goods manufactured and removed during the period 18.01.2001 to 31.03.2005 underSection 11A(2)of the Central Excise Act 1944 and also confirmed the demand of education cess amounting to             Rs. 25,595/- (Rupees Twenty Five Thousand Five Hundred and Ninety Five only) and also levied interest underSection 11ABof the Central Excise Act and imposed penalty of Rs. 59,22,658/- (Rupees Fifty Nine Lakhs Twenty Two Thousand Six Hundred and Fifty Eight only) underSection 11ACof the Central Excise Act 1944 and under Rule 25 of the Central Excise Rules 2002. Hence the present appeal.2.	The learned counsel for the appellant submitted that the impugned order dated 30.03.2007 is bad in law and not sustainable as the same has been passed against the dead person Shri Harilal M. Patel who was the sole proprietor of the appellant M/s. New Sharada Industries and who died on 27.12.2011, during the pendency of the present appeal. He further submitted that in the impugned order itself it has been observed that Harilal M. Patel was the proprietor of      M/s. New Sharada Industries i.e. the appellant. He also submitted that after the death of the sole proprietor, Ashok Kumar K.H. who is the son of the sole proprietor has filed an affidavit to the effect that he has not succeeded to the business of the deceased and he is carrying on business on his own personal capacity and has also obtained new and fresh Central Excise Registration certificate in his name. He has also stated in the affidavit that he is not interested in pursuing the appeal as he is not the transferee of the business nor did he acquire the business of the deceased during the life time of his father as his successor. He has also stated in the affidavit that there is no legal provision to recover dues from him as the legal heir in view of the law laid down by the Tribunal in the case ofDhiren Gandhi V. CCE[2011 (266) E.L.T. 125 (Tri.-Bang.)] affirmed by the Honble Karnataka High Court in [2012 (281) E.L.T. 64 (Kar.)]and approved by the Honble Supreme Court inShabina Abraham V. CCE[2015 (322) E.L.T. 372 (SC)].2.1.	The learned counsel for the appellant further submitted that it is a settled law that no proceedings can be initiated against the dead person as it amounts to violation of the principles of natural justice inasmuch as the person who is proceeded against is not alive to defend himself. In support of this submission, he relied upon the following decisions:a)	Mafhh Products V. CCE & C, Suratreported in 2003 (57) RLT 596 (Tri.-Mumbai);b)	D. Matai V. CCE, Mumbai reported in 2000 (126) E.L.T. 1264 (Tri.);c)	Shabina Abraham & Ors. V. CCE & Creported in 2015-TIOL-159-SC-CX=2015 (322) E.L.T. 372 (S.C.);d)	CCE, Bangalore-III V. Shri Dhiren Gandhi reported in 2012-TIOL-433-HC-KAR-CX=2012 (281) E.L.T. 64 (Kar.)=2012 (27) S.T.R. 452 (Kar.)e)	Bharati Mulchand Chheda V. CCE, Mumbai-Vreported in 2016 (336) E.L.T. 93 (Tri.-Mum.)

2.2.	The learned counsel for the appellant further submitted that as per the Rule 22 of CESTAT Procedure Rules, the appeal shall abate on the death of the appellant. The said Rule is reproduced herein below:RULE 22. Continuance of proceedings after death or adjudication as an insolvent of a party to the appeal or application: Where in any proceedings the appellant or applicant or a respondent dies or is adjudicated as an insolvent or in the case of a company, is being wound up, the appeal or application shall abate, unless an application is made for continuance of such proceedings by or against the successor-in-interest, the executor, administrator, receiver, liquidator or other legal representative of the appellant or applicant or respondent, as the case may be:Provided that every such application shall be made within a period of sixty days of the occurrence of the event:Provided further that the Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period so specified, allow it to be presented within such further period as it may deem fit.3.	On the other hand the learned AR reiterated the findings of the learned Commissioner and submitted that for recovery of liabilities of dead man, his legal representative can be proceeded against and the estate of the deceased is liable.4.	We have heard both the parties and perused the records. On our careful consideration, we find that the appellant was sole proprietorship concern and Shri Harilal M. Patel was the sole proprietor of the appellant-firm and he died on 27.12.2011 when the appeal was still pending. Further we find in view of the law cited supra no recovery proceedings can be initiated against the dead person. Therefore keeping in view the facts and circumstances of the case and the decisions cited supra, we set aside the impugned order by allowing the appeal of the appellant.(Order pronounced in open court on 30.06.2016)

(ASHOK K. ARYA)
TECHNICAL MEMBER 	(S.S GARG)
JUDICIAL MEMBER

iss