2017 (6) TMI 802 - AT - Central Excise

Natural justice - recovery proceedings against a dead person - Held that - the appellant who is a sole partnership concern of Shri V.P. Viswanathan Nair who as per the death certificate has died on 29.05.2015 when the appeal was pending before the Tribunal - reliance was placed in the case of Shabina Abraham Vs. Collector of CE & Customs 2015 (7) TMI 1036 - SUPREME COURT , where it was held that no recovery proceedings can be initiated against the dead person - Since the appeal of the proprietor who has died during the pendency of the appeal has abated similarly the appeal filed by the Department is not maintainable on account of the death of the sole proprietor.

Summary

Issues: Appeal against Order-in-Original, Abatement of appeal due to death of appellant, Recovery proceedings against deceased person, Legal representative's liability.

Analysis:
The appeal before the CESTAT Bangalore was directed against Order-in-Original No. 27/2007 dated 24/05/2007. The appellant, a proprietary concern engaged in manufacturing, was found not paying central excise duty on excisable goods. The appellant's proprietor passed away during the pendency of the appeal, leading to a question of abatement as per Rule 22 of the CESTAT Procedure Rules. The appellant argued that recovery proceedings against a deceased person violate natural justice, citing various legal precedents. The AR contended that the legal representatives could be held liable for the deceased's liabilities.

The CESTAT considered both parties' submissions and noted the death of the sole proprietor during the appeal. Relying on the Supreme Court's decision in Shabina Abraham Vs. Collector of CE & Customs, the Tribunal held that no recovery proceedings could be initiated against a deceased person. Consequently, the CESTAT found that the appeal abated due to the appellant's death and disposed of the case accordingly. The Department's appeal, E/661/2007, was also found not maintainable following the abatement of the appellant's appeal due to the proprietor's demise.

In conclusion, the CESTAT ruled that the present appeal abated due to the death of the appellant, in line with Rule 22 of the CESTAT Procedure Rules and legal precedents. The decision highlighted the principle that recovery proceedings cannot be pursued against a deceased person, leading to the disposal of both the appellant's and the Department's appeals.