2019 (10) TMI 811 - AT - Central Excise

Maintainability of appeal - appropriate forum - question of law or fact or both - a new legal issue raised that the appellant was a Partnership Firm and the same was dissolved by Dissolution Deed dated 09.03.2007 accordingly no proceeding could have been continued against the dissolved Partnership Firm. - HELD THAT - The fresh issue raised by the Ld. Counsel is indeed a question of law which can be raised at any stage of litigation. However the question of law raised by the appellant is mixed question of law and facts and particularly this issue has not been raised by the appellant before lower authorities nor has been considered the same. We are of the view that since the question of law is mixed of the facts and law the same needs to be considered by the lower authority. Accordingly we remand the matter to the adjudicating authority to pass a fresh order after considering the new defense raised by the appellant. Appeal disposed off by way of remand.

Summary

Issues:
1. Duty demand on gray fabric shortage
2. Appeal against duty demand reduction
3. Legal issue of partnership firm dissolution

Analysis:
1. The case involved a duty demand due to a shortage of gray fabric found during preventive checks at the manufacturing unit of the appellant firm. The investigation led to a show cause notice proposing duty demand, interest, and penalties on the appellant and its partners. The Commissioner (appeals) partially allowed the appeal, reducing the duty demand and penalties. However, in the subsequent round of litigation, the duty demand was confirmed, along with penalties on the appellant and its partners, which was challenged before the Commissioner (Appeals).

2. During the appeal, the appellant raised a new legal issue regarding the dissolution of the partnership firm. The appellant argued that since the firm was dissolved, no proceedings could continue against it. Citing legal precedents, the appellant contended that the orders passed against the dissolved firm were illegal. The Revenue, on the other hand, argued that the proceedings were initiated before the dissolution, and hence, the liability should still apply to the partners.

3. The appellate tribunal considered the new legal issue raised by the appellant as a mixed question of law and facts. While acknowledging the validity of raising such issues at any stage of litigation, the tribunal noted that the issue had not been raised before the lower authorities. As a result, the tribunal remanded the matter to the adjudicating authority to consider the new defense raised by the appellant. The appellant was directed to provide all relevant records to the adjudicating authority for a fresh decision within three months.

In conclusion, the appeals were disposed of by remanding the matter to the adjudicating authority for a fresh decision considering the legal issue raised by the appellant regarding the dissolution of the partnership firm. The tribunal emphasized the need to address the new defense and produce all records for a timely resolution of the case.