Karnataka High Court
Commissioner Of Central Excise vs M/S New Sharada Industries on 29 August, 2018
Bench: Vineet Kothari, S.Sujatha
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IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 29TH DAY OF AUGUST 2018
PRESENT
THE HON'BLE Dr.JUSTICE VINEET KOTHARI
AND
THE HON'BLE Mrs.JUSTICE S.SUJATHA
C.E.A.No. 4/2017
BETWEEN:
PRESENT ADDRESS :
COMMISSIONER OF CENTRAL EXCISE
BENGALURU-II
O/O THE COMMISSIONER
BENGALURU-II
COMMISSIONERATE
C.R. BUILDING
QUEEN'S ROAD,
BENGALURU - 560 001.
OLD ADDRESS :
COMMISSIONER OF CENTRAL EXCISE
P.B.NO. 5400
QUEEN'S ROAD
BENGALURU - 560 001
KARNATAKA.
...APPELLANT
(BY MR. JEEVAN J. NEERALGI, ADVOCATE)
AND:
Date of Judgment 29.08.2018, C.E.A.No.4/2017
Commissioner of Central Excise Vs.
M/s. New Sharada Industries
2/8
M/S. NEW SHARADA INDUSTRIES
NO. 5876, BY-PASS ROAD
NELAMANGALA
BENGALURU - 562 123.
...RESPONDENT
THIS C.E.A/CENTRAL EXCISE APPEAL IS FILED
UNDER SECTION 35G(2) OF THE CENTRAL EXCISE ACT,
1944, ARISING OUT OF ORDER DATED 30/06/2016
PASSED IN FINAL ORDER NO.20500/2016 PRAYING TO
ALLOW THE ABOVE APPEAL BY DULY SETTING ASIDE THE
FINAL ORDER NO. 20500/2016 DATED 30/06/2016
PASSED BY THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, SOUTH ZONAL BENCH,
BANGALORE OR PASS ANY SUCH ORDER AS THIS
HON'BLE COURT DEEMS FIT AND PROPER IN THE
CIRCUMSTANCES OF THE CASE.
THIS C.E.A/CENTRAL EXCISE APPEAL COMING ON
FOR ORDERS THIS DAY, Dr. VINEET KOTHARI J. PASSED
THE FOLLOWING:-
JUDGMENT
Mr.Jeevan J. Neeralgi, Advocate for Appellant - Revenue The Revenue has filed this appeal against the order dated 30.06.2016 passed by the CESTAT, South Zonal Branch, Bengaluru, in Appeal No.E/487/2007- DB - M/s. New Sharada Industries vs. Commissioner of Central Excise, which was directed against the order Date of Judgment 29.08.2018, C.E.A.No.4/2017 Commissioner of Central Excise Vs. M/s. New Sharada Industries 3/8 passed by the Commissioner of Central Excise in Order No.2/2007 on 30.03.2007, confirming the demand of central excise of Rs.58,97,063/- and also penalty on the assessee. The operative portion of the order of the Commissioner of Central Excise is quoted here below for ready reference :
"(i) I confirm 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 18.01.01 to 31.03.05 under Section 11A(2) of the Central Excise Act, 1944.
(ii) I confirm the demand of Education Cess amounting to Rs.25,595/- (Rupees twenty five thousand five hundred and ninety five only) being the Education Cess leviable on the goods manufactured and cleared under Section 11A(2) of the Central Excise Act, 1944.
(iii) I confirm the Central Excise duty of Rs.6,00,000/- (Rupees six lakhs only) Date of Judgment 29.08.2018, C.E.A.No.4/2017 Commissioner of Central Excise Vs. M/s. New Sharada Industries 4/8 already paid by the assessee vide two TR6 Challans both dated 24.09.04 each for Rs.3,00,000/- and appropriate the same towards the demand made vide para (i) above.
(iv) I demand interest at the rate as fixed by the Central Government during the relevant period of time, from the first date of the month succeeding the month in which the duty as mentioned in (i) and (ii) ought to have been paid under Section 11AB of the Central Excise Act, 1944.
(v) I impose a penalty of Rs.59,22,658/-
(Rupees fifty nine lakhs twenty two thousand six hundred fifty eight only) under Section 11AC of the Central Excise Act, 1944 and under Rule 25 of the Central Excise Rules, 2002."
2. The proprietor of the assessee firm, Mr. Harilal M. Patel filed appeal before the learned Tribunal which was registered as Appeal No. E/487/2007-DB. However during the pendency of the said appeal, it appears that Date of Judgment 29.08.2018, C.E.A.No.4/2017 Commissioner of Central Excise Vs. M/s. New Sharada Industries 5/8 the said proprietor Mr. Harilal M. Patel expired on 27.12.2011, which fact was brought to the notice of even this Court by the communication of his son Mr. Ashok Patel by his letter dated 10.08.2017. The fact of the death of Mr. Harilal M.Patel was also brought to the notice of the Tribunal and therefore on that basis alone, the learned Tribunal set aside the impugned order of the Commissioner with the following observation :
"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."
Date of Judgment 29.08.2018, C.E.A.No.4/2017 Commissioner of Central Excise Vs. M/s. New Sharada Industries 6/8
3. Having heard the learned Counsel for the Revenue, we are of the opinion that the view expressed by the Tribunal is not sustainable in law, as the demand of excise duty under the impugned order of the learned Commissioner could not be set aside solely on the ground of death of the proprietor and the learned Tribunal ought to have allowed the legal representative of the proprietor Mr. Harilal M. Patel himself to either contest the said appeal on merits or the learned Tribunal should have decided the appeal on its own merits, after the legal representative was taken on record.
4. Since the legal representative - son, Mr. Ashok Patel himself moved the said application before the Tribunal, he was very much available to be heard in the matter. Therefore, we are of the opinion that the learned Tribunal has erred in allowing the said appeal simplicitor on account of the death of the proprietor of Date of Judgment 29.08.2018, C.E.A.No.4/2017 Commissioner of Central Excise Vs. M/s. New Sharada Industries 7/8 the assessee in question. The demand raised under the impugned order of the Commissioner could be recovered from the estate of the deceased Mr. Harilal M. Patel and therefore the appeal before the Tribunal against that order could not be said to abate with the death of the proprietor.
5. Therefore, the impugned order passed by the learned Tribunal deserves to be set aside and the present appeal filed by the Revenue deserves to be allowed on this ground alone.
6. Accordingly, the appeal is allowed and we set aside the order of the CESTAT dated 30.06.2016. The matter is restored/remanded back to the learned Tribunal for deciding the appeal afresh on merits in accordance with law.
7. A copy of this order may be sent to the Legal Representative of the proprietor of the assessee firm -
Date of Judgment 29.08.2018, C.E.A.No.4/2017 Commissioner of Central Excise Vs. M/s. New Sharada Industries 8/8 Mr. Ashok Patel, at the address of the firm as well as the address given in the memorandum of appeal, with a direction that he may appear before the learned Tribunal in the first instance on 18th September, 2018.
Sd/-
JUDGE Sd/-
JUDGE Mgn/-