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2017 (8) TMI 586 - AT - Central ExciseLiability of interest - death of proprietor - invocation of Section 11AA of the erstwhile Central Excise Act - Held that - as per Rule 22 of CESTAT (Procedure) Rules, where in any proceedings the appellant or applicant or a respondent dies or is adjudged as an insolvent or in the case of a company, is being wound up, the appeal or application shall abate - demand of interest unsustainable - appeal dismissed - decided against Revenue.
Issues:
1. Liability to pay interest on excise duty demand. 2. Abatement of appeal due to death of the proprietor. 3. Interpretation of legal provisions regarding interest demand. Issue 1: Liability to pay interest on excise duty demand The appeal was filed by the Revenue against an order by the Commissioner (Appeals) where it was held that the respondent-assessee was not liable to pay the interest demanded on excise duty. The case involved M/s. Tee Gee Kay Industries, a unit engaged in manufacturing Electricity Tower Parts. The original adjudicating authority confirmed the demand for excise duty, which was later upheld by the CESTAT. The Department initiated recovery proceedings under the Customs Act, and a writ petition was filed against this. The High Court upheld the Department's claim except for a specific amount. The petitioner was granted liberty to seek reduction or waiver of interest. Despite paying the excise duty amount, the interest accrued was not paid. The Commissioner of Central Excise rejected the petition for waiver of interest, leading to the appeal by the assessee. The Commissioner (Appeals) allowed the appeal, prompting the Revenue to file the present appeal. Issue 2: Abatement of appeal due to death of the proprietor The learned counsel for the appellant argued that the appeal abates as per Rule 22 of CESTAT (Procedure) Rules 1982 when the proprietor of the concern dies. The proprietor, T.G. Krishnan, had passed away during the proceedings, and the death certificate was submitted. The counsel further contended that, as per legal provisions, the appeal abates in such circumstances. The Tribunal found merit in this argument and dismissed the Revenue's appeal based on the abatement due to the death of the proprietor. Issue 3: Interpretation of legal provisions regarding interest demand The Revenue contended that the impugned order was not sustainable as it did not consider the facts and evidence on record. It was argued that interest could not be demanded as per Section 11AB(2) of the Central Excise Act since the demand was not issued under Section 11A. The Commissioner (Appeals) had observed that interest could not be demanded for the period before a specific date. On the contrary, the appellant's counsel defended the order, stating that the demand of interest was rightly dropped. The Tribunal analyzed the legal provisions and upheld the Commissioner (Appeals) decision, citing the case law of CCE, Coimbatore Vs. M.P. Tapes. The Tribunal found no merit in the Revenue's appeal and dismissed it accordingly. In conclusion, the judgment addressed the issues of liability to pay interest on excise duty demand, abatement of appeal due to the death of the proprietor, and the interpretation of legal provisions regarding interest demand. The Tribunal dismissed the Revenue's appeal, upholding the decision of the Commissioner (Appeals) in favor of the assessee.
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