Per : Sahab Singh This is an appeal filed by the appellants against the order passed by the Commissioner of Central Excise(Appeals).
2. The facts in brief are that the appellants, M/s. Vira & Co. were engaged in the purchasing of fabrics falling under Chapter 52 and 54 of the Central Excise Tariff and sending the same for processing i.e. pleating and embossing. These processes became dutiable with effect from 1.4.2003 as the exemption available to these processes was withdrawn vide Notification No.6/2003. Subsequently, in the month of October, these processes were again exempted vide Notification No. 75/2003 dated 27.10.2003. In the intervening period from 1.4.03 to 26.10.2003, a show-cause notice was issued to the appellants demanding duty amounting to Rs. 31,603/- under Section 11A of the Central Excise Act. This show-cause notice was adjudicated by the Asstt.Commissioner who confirmed the duty of Rs. 31,603/- on the appellants and also imposed penalty of the same amount under Sec. 11AC on the appellants and penalty of Rs. 5,000/- was also imposed on the second appellant. The assessee went in appeal before the Commissioner(Appeals) who rejected the appeal in the case of the first appellant and set aside the penalty against the second appellant Shri Bharat J.Vira.
3. The ld.counsel appearing for the appellants submitted that M/s. Vira & Co. was the proprietary concern and Shri Jadavji F.Vira was the proprietor . The proprietor Shri Jadavji F.Vira died on 8.10.05. The show-cause notice was issued on 25.4.2006 demanding duty for the period from 1.4.2003 to 26.10.2003. He submitted that no show-cause notice demanding duty can be served on the appellant as there is no provision under the Central Excise Act for demanding duty from the legal heir. After the death of Shri Jadavji F.Vira, his son Shri Bharat J.Vira has made the new proprietary firm which was handled by Shri Bharat J.Vira. He, therefore, submitted that no demand can be made from the legal heir after the death of the proprietor. In support of this contention, he relied on the decision of the Tribunal in the case of D.Matai vs. CCE, Mumbai reported in 2000(126)ELT 1264(Tri). He, therefore, requested that the appeal should be allowed on this ground alone.
4. Ld.authorised representative appearing for the Revenue defended the findings of the lower authorities and had stated that since Shri Bharat J.Vira was the legal heir of M/s. Vira & Co. the assets and liability of the firm will be his responsibility. Therefore, the demand is rightly issued to the legal heir.
5. After hearing both sides, I find that the issue is whether the show-cause notice for demand can be issued to Shri Bharat J.Vira the son of Shri Jadavji F.Vira who died on 8.10.05, In this case the show-cause notice was issued on 25.4.06 i.e. after the death of Jadavji F.Vira demanding duty for the period 1.4.03 to 26.10.03. In the case of D.Matai vs. Collector of Central Excise, Mumbai (supra) cited by the ld.counsel, it was held by the Tribunal that show-cause notice issued after the death of sole proprietor of the concern to the legal heir of the proprietary concern is not sustainable in the absence of such provision in the Central Excise Act or under the Rules. The Tribunal has relied on the judgment of the Honble Supreme Court in the case of State of Punjab vs. Jullundur Vegetables Syndicate reported in 1966 Vol.XVII Sales Tax case (SC). I find that the facts and circumstances of the present case are similar to the case cited by the ld.counsel and this is squarely covered by the said decision. Following the ratio of the cited decision, I allow the appeal of the appellants.
6. The appeal is allowed. (Pronounced in court) Sahab Singh Member(Technical)
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