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TMI Blog2024 (5) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... situation herein as it stipulates that where the property to be attached consists of the share or interest of the defaulter in property belonging to him and another as coowners, the attachment shall be made by a notice to the defaulter prohibiting him from transferring the share or interest or charging it in any way . Whether the duty amount with interest and penalty which has become due and payable by the defaulting firm, could be recovered by attaching the entire property in which the appellants personal share is on 20%? - HELD THAT:- The answer to this question should be in the negative. A partnership firm under the Indian Partnership Act, 1932 is not a separate legal entity and the liability of the partners is joint and several u/s 25 ibid - Here the share of the appellant in the attached personal property is merely 20% whereas 80% of the share therein is that of his brothers who have nothing to do with the defaulting firm or their activities - In the absence of any specific provision under the Rules for recovery of the dues by attaching the personal property of some other partnership in which the majority of the shareholders have nothing to do with the recovery of the governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) Shri Prashant M. Golwala - -33% (ii) Shri Anand Sorte -33% (iii) Rakesh Jagdish Mehta -25% [Appellant herein] (iv) Jagdish M. Mehta -9% [Appellant s father] 3. Jagdish M. Mehta and Rakesh Jagdish Mehta (appellant herein) are father son. Since the department found certain discrepancies/illegality in the invoices/bills etc. of M/s. Turbo Micro Systems, therefore a show cause notice dated 4.3.1994 was issued to the firm as well as its partners for recovery of Central Excise duty amount of Rs.5,67,673/- and the same was culminated in the adjudicating order dated 24.2.1998 confirming the duty demand of Rs.5,67,673/- alongwith interest and equal penalty on the partnership firm and also imposing personal penalty of Rs.1,50,000/- on each of the partners of the firm including the appellant and his father. Although the appellant and his father had filed the appeal against the adjudication order but since that was filed beyond the prescribed period of limitation therefore dismissed being not maintainable. Further Appeal before this Tribunal as well as before the Hon ble High Court also received the same fate of dismissal. As a result the duty demand alongwith interest and penalty on firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,673/- and the appellant being the partner of 25% , his share comes out to be Rs.1,41,198/- and similarly out of the equal penalty imposed on the firm, the share of the appellant could be Rs.1,41,198/- and adding 1,50,000/- personal penalty in the said amount, the total liability of the appellant comes to Rs.4,33,836/-[emphasis supplied]. So far as the father of the Appellant is concerned who was partner of 9%, his duty liability comes to Rs.51,091/- and equal penalty share Rs.51,091/- and adding personal penalty of Rs.1,50,000/- the total liability of appellant s father Mr. Jagdish M. Mehta comes to Rs.2,52,181/-[emphasis supplied]. Adding both the aforesaid amounts together, the total liability of the father son duo comes out to Rs. 6,86,018/- which has already been paid. According to learned counsel, the other two partners of M/s. Turbo Micro System who are 66% shareholders have not paid any amount although their share of duty and penalty on the firm comes to Rs.7,49,328/- nor any personal penalty was paid by them and despite having shared their detailed addresses with the department, no action or recovery has been initiated against them. He further submits that in the attached ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been done under the Rules of 1995, which were made in exercise of the powers conferred by Section 156 r/w. Section 142 of the Customs Act, 1962. Rule 2(vi) of the said Rules of 1995 defined defaulter as any person from whom Government dues are recoverable under the Act. Chapter II of the said Rules deals with the procedure for the attachment of property. The issuance of certificate under rule 3 of chapter II is for the dues not paid by the defaulter to the government and the amounts specified as the amounts due from such person . Such person can only be the defaulter as defined u/r. 2(vi) and no one else. Rule 10 is very relevant for the situation herein as it stipulates that where the property to be attached consists of the share or interest of the defaulter in property belonging to him and another as coowners, the attachment shall be made by a notice to the defaulter prohibiting him from transferring the share or interest or charging it in any way . The language of Rule 10 is very crisp clear but despite that learned commissioner while rejecting the submission of the appellant and also of two other partners in the joint property recorded the finding as under:- 8. The submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by the appellant herein alongwith personal penalty on him as well as on his father. Now the issue is about the interest imposed on the duty amount, by the adjudicating authority in Order-in-Original dated 24.02.1998 which has attained finality. The interest has been imposed under section 11AB of Central Excise Act, 1944. Here it is interesting to note that duty demand has been made and confirmed for the goods cleared during the year 1993 and the show-cause notice was issued on 04.03.1994. Admittedly during the period Section 11AB ibid was not brought into force by the legislature as the same has been introduced w.e.f. 28.09.1996. That s why there is no whisper about charging of interest u/s 11AB ibid in the show-cause notice. Not only that, sub-section (2) of interest under Section 11AB stipulates that the provisions of sub-section (1), which provides for charging of interest on excise duty, shall not apply to cases where the duty became payable before the date on which the Finance (no.2) Bill, 1996 receives the assent of the President. 11. Although the Order-in-original dated 24.02.1998 has attained finality as mentioned in earlier paragraphs but in view of the peculiar fact ..... 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