2016 (3) TMI 850 - AT - Central Excise

Validity of order against the dead person - Held that - We find that the learned Commissioner was aware of the fact while passing the impugned order that the proprietor of M/s. Canan Domestic Appliances had already expired on 12.11.2003 whereas the impugned order was passed on 29.9.2006. In fact this case was remanded by the Tribunal vide its order dated 15.2.2005 setting aside the order of the Commissioner of Central Excise and remanding the matter for de novo adjudication. Even at that time the proprietor was no more, but in spite of this, the learned Commissioner passed the impugned order against the dead person who was the sole proprietor of M/s. Canan Domestic appliances, which is against the settled position of law as held by various decisions of the Tribunal We are of the considered opinion that once the factum of death of the sole proprietor has come to the knowledge of the learned Commissioner, the learned Commissioner should have dropped the proceedings rather than passing the impugned order, but he chose to pass the impugned order against the dead person, which is not sustainable in law.

Summary

Issues:
1. Validity of order passed against a deceased person.
2. Adjudication proceedings against a dead sole proprietor.
3. Principles of natural justice in legal proceedings.

Analysis:

Issue 1: Validity of order passed against a deceased person
The appeal challenged an order confirming a demand against a sole proprietorship, M/s. Canan Domestic Appliances, following the demise of the proprietor, Mr. Mulchand Chheda. The appellant, Mrs. Bharati Mulchand Chheda, acting as the legal representative, contended that the order against the deceased was unlawful. The learned counsel argued that proceedings against a deceased individual violate natural justice, as the deceased cannot defend themselves. Notably, the Commissioner was aware of Mr. Chheda's death when passing the order, which was issued posthumously. The Tribunal held that the Commissioner erred in proceeding against a deceased individual, contravening established legal principles. Citing relevant case law, the Tribunal deemed the order unsustainable due to its issuance against a deceased person.

Issue 2: Adjudication proceedings against a dead sole proprietor
The Tribunal noted that despite being aware of Mr. Chheda's passing, the Commissioner proceeded with the adjudication against M/s. Canan Domestic Appliances. This action was taken even after a prior remand by the Tribunal, indicating a lack of procedural adherence. The Tribunal emphasized that once the Commissioner was informed of the sole proprietor's demise, the proceedings should have been discontinued. By continuing the adjudication against a deceased individual, the Commissioner acted against established legal norms. The Tribunal highlighted the necessity of respecting legal principles, especially in cases involving deceased persons, to uphold the integrity of the adjudicatory process.

Issue 3: Principles of natural justice in legal proceedings
The Tribunal's decision was grounded in upholding the principles of natural justice. It emphasized that legal proceedings must adhere to fundamental principles, including the right to defend oneself. Proceeding against a deceased individual undermines these principles, as highlighted by the appellant's counsel. By setting aside the impugned order and allowing the appeal, the Tribunal reaffirmed the importance of respecting procedural fairness and ensuring that legal actions are taken in accordance with established norms. The Tribunal's ruling underscored the significance of upholding natural justice in all legal proceedings, especially when dealing with sensitive matters such as the adjudication of deceased individuals.

In conclusion, the Tribunal's judgment centered on the invalidity of legal actions taken against a deceased sole proprietor, emphasizing the need for procedural adherence and respect for natural justice principles in adjudicatory processes.