2018 (9) TMI 643 - HC - Central Excise

Demand of Excise Duty - demand set aside on the ground of death of proprietor - Held that - 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. 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 the assessee in question. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against order confirming demand of central excise and penalty - Tribunal setting aside order due to death of proprietor - Legality of Tribunal's decision - Recovery of demand from estate of deceased proprietor.

Analysis:
The appeal was filed by the Revenue against the order of the CESTAT confirming the demand of central excise and penalty on the assessee. The Commissioner of Central Excise had confirmed the demand of central excise duty, education cess, and imposed a penalty on the assessee. The Tribunal set aside the Commissioner's order solely based on the death of the proprietor of the assessee firm. The Tribunal held that no recovery proceedings could be initiated against a deceased person, leading to the appeal being allowed.

However, the High Court found the Tribunal's decision unsustainable in law. The Court opined that the demand of excise duty could not be set aside merely due to the death of the proprietor. The legal representative of the deceased proprietor should have been allowed to contest the appeal on merits or the Tribunal should have decided the appeal based on its own merits after including the legal representative.

The High Court emphasized that the legal representative, the son of the deceased proprietor, had moved the application before the Tribunal and was available to be heard in the matter. The Court held that the appeal could not be said to abate with the death of the proprietor as the demand could be recovered from the estate of the deceased. Therefore, the High Court concluded that the Tribunal erred in allowing the appeal solely on the ground of the proprietor's death.

Consequently, the High Court allowed the appeal filed by the Revenue, setting aside the Tribunal's order. The matter was remanded back to the Tribunal for a fresh decision on the appeal on its merits in accordance with the law. The Court directed that a copy of the order be sent to the legal representative of the proprietor to appear before the Tribunal on a specified date.