2011 (9) TMI 553 - AT - Central Excise

Show cause notice - Held that - Notice issued after the death of sole proprietor of the concern to the legal heir of the proprietary concern is not sustainable. - (D.Matai vs. Collector of Central Excise (2000 - TMI - 50031 - CEGAT))

Summary

Issues: Show-cause notice validity regarding demand on legal heir after the death of the proprietor.

The appeal before the Appellate Tribunal CESTAT, Mumbai involved a dispute where the appellants, M/s. Vira & Co., were engaged in purchasing fabrics for processing, which became dutiable due to a change in exemption status. A show-cause notice was issued demanding duty for a specific period, which was confirmed by the Asstt. Commissioner and upheld by the Commissioner (Appeals). The main argument raised was whether the legal heir, Shri Bharat J.Vira, could be held liable for the duty demand issued after the death of the proprietor, Shri Jadavji F.Vira. The appellant's counsel contended that no duty demand could be made from the legal heir after the death of the proprietor, citing a Tribunal decision and requested the appeal's allowance based on this ground alone.

The authorized representative for the Revenue argued that since Shri Bharat J.Vira was the legal heir, the liabilities of the firm would pass on to him, justifying the duty demand on the legal heir. The Tribunal, after considering the arguments from both sides, analyzed the issue of whether a show-cause notice for demand could be issued to the legal heir after the death of the sole proprietor. Referring to a previous Tribunal decision and a Supreme Court judgment, the Tribunal held that issuing a show-cause notice to the legal heir after the proprietor's death was not sustainable in the absence of a specific provision in the Central Excise Act or Rules. The Tribunal found the facts of the present case similar to the cited decision and ruled in favor of the appellants, allowing the appeal based on the established legal precedent.

In conclusion, the Appellate Tribunal CESTAT, Mumbai allowed the appeal, emphasizing that the show-cause notice demanding duty from the legal heir after the death of the proprietor was not sustainable based on the legal principles established in previous judgments.