By TIOL News Service

MUMBAI, MAR 23, 2016: MRS Bharati Mulchand Chheda, has filed the present appeal in the capacity of legal representative of late Mr. Mulchand G. Chheda who was the sole proprietor of M/s. Canan Domestic Appliances. The appellant at the relevant time was a housewife and it was her husband Mr. Mulchand Chheda who was running the business.

In August 2006, the appellant received notices from the office of the CCE, Mumbai-V addressed to her husband. The appellant was not knowing the implication of the notice and was afraid to appear before the excise authority and, therefore, did not respond to the said notice and on 10.10.2006, the appellant was shocked to receive the impugned order whereby the respondent CCE, Mumbai-V had upheld the allegations leveled in the SCN dated 26.2.1998 and confirmed duty demand of Rs.33,83,067/- on M/s. Canan Domestic Appliances and also imposed penalty of Rs.16,44,577/- under Section 11ACof CEA, 1944 and ordered for the recovery of interest along with other penalties.

Nonetheless, an appeal was filed against the said order in the year 2007.

Before the CESTAT, the appellant submitted that the impugned order dated 29.9.2006 is bad in law as the same has been passed against the deceased Mr. Mulchand Chheda ; that the fact that Mr. Mulchand Chheda was the sole proprietor of M/s. Canan Domestic Appliances and he expired on 12.11.2003 was mentioned in the notice as well as in the adjudication order and, therefore, the proceedings should have been dropped. It is further emphasized that it is a settled law that no proceedings can be initiated against a deceased person as it amounts to violation of the principles of natural justice.

Reliance is placed on the following decisions -

+ D. Matai vs. CCE, Mumbai - 2002-TIOL-477-CESTAT-DEL

+ Shabina Abraham & Ors - 2015-TIOL-159-SC-CX

+ CCE, Bangalore-III vs. Shri Dhiren Gandhi - 2012-TIOL-433-HC-KAR-CX

The AR supported the order of the CCE, Mumbai-V.

The Bench observed -

"6. We find that the learned Commissioner was aware of the fact while passing the impugned order that the proprietor of M/s. Canan Domestic Appliances had already expired on 12.11.2003 whereas the impugned order was passed on 29.9.2006. In fact this case was remanded by the Tribunal vide its order dated 15.2.2005 setting aside the order of the Commissioner of Central Excise and remanding the matter for de novo adjudication. Even at that time the proprietor was no more, but in spite of this, the learned Commissioner passed the impugned order against the dead person who was the sole proprietor of M/s. Canan Domestic appliances, which is against the settled position of law as held by various decisions of the Tribunal cited above. We are of the considered opinion that once the factum of death of the sole proprietor has come to the knowledge of the learned Commissioner, the learned Commissioner should have dropped the proceedings rather than passing the impugned order, but he chose to pass the impugned order against the dead person, which is not sustainable in law."

The order was set aside and the appeal was allowed with consequential relief.

In passing: Also read Income Tax Notice to a Dead Assessee!& 2016-TIOL-398-HC-DEL-IT.

(See 2016-TIOL-694-CESTAT-MUM)