2004 (6) TMI 397 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of duty and penalty on the Firm.

Analysis:
1. The applicants sought waiver of pre-deposit of duty and penalty amounting to Rs. 46,53,866/- each, as the demand was confirmed due to clearing the final product without duty payment.

2. The contention raised by the applicants was that the firm was dissolved before the show cause notice was served, and no notice was served on them. They argued that no demand could be raised against a dissolved firm. However, the demand was based on private records recovered from the firm's premises. The applicants also challenged the action in the Hon'ble Madhya Pradesh High Court, which directed the partners to respond to the notice, leading to the impugned order.

3. The Revenue relied on a decision of the Hon'ble Kerala High Court, stating that in cases of short-levy of duty, proceedings can continue against the manufacturer, and the legal representative must meet the demand even after the predecessor's death. Considering this precedent, the Tribunal found it inappropriate for a total waiver of duty. The applicants were directed to deposit Rs. 5 lakhs within 8 weeks. Upon this deposit, the remaining duty and penalty were waived for the appeal hearing, scheduled for a later date.

This judgment underlines the importance of legal representation and the obligations of successors in cases of duty liabilities. It highlights the significance of responding to show cause notices even after firm dissolution. The decision also emphasizes the need to comply with deposit requirements to proceed with appeal hearings effectively.