TMI Blog2007 (8) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... 654/98). The work was to be done on labour contract basis and as per the drawings and specifications supplied by M/s. ITC. All materials for the work were supplied by M/s. ITC and any wastage thereof was to the contractor's account. The responsibility of organizing material movement was with the contractor. In respect of all labour directly or indirectly employed for the contracted works, SJA had to comply with the provisions of the Contract Labour (Regulation and Abolition) Act (1970), the Minimum Wages Act (1948), the Payment of Wages Act (1936) and all other laws made for the benefit of labourers. It was open to them, under the contract, to employ sub-contractors to execute the works. But, in that case, M/s. SJA. were liable to ensure that all the obligations of the contractor were duly carried out by the sub-contractors. The work was executed by M/s. SJA through sub-contractors in 1992-93, with the raw materials supplied by ITC and as per the specifications, drawings and designs supplied by ITC. On 12-12-95, officers of Central Excise visited Hotel Rajputana Palace Sheraton (owned by M/s. ITC) and called for details of the above contract, which were furnished by M/s. ITC. Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rs. 10 lakhs respectively on Shri Jayant Juneja and M/s. Hotel Rajputana Palace Sheraton under Rule 209A. All the seized furniture items in respect of which duty demand was confirmed were confiscated under Rule 173Q with option to M/s Hotel Rajputana Palace Sheraton to redeem the goods by paying Rs. 5.25 lakhs as redemption fine along with the duty amount of Rs. 17,51,329/- (in the event of this amount of duty not having been paid by the assessees by the time of redemption of the goods). The present appeals are against the order of the adjudicating authority. 2. Heard counsel for the appellants and Shri Atul Dikshit (SDR) for the Revenue. The main issue raised in appeal Nos. 637-639/98 was whether, after the dissolution of the firm, any goods manufactured by M/s. SJA could validly be assessed to duty in their name and whether any demand of such duty could be raised on them under the Central Excise Act and the relevant rules framed thereunder. The firm had been dissolved on 5-10-1996 and one of the partners namely, Sita Juneja as proprietress was running the business thereafter under the name and style of "Sita Juneja Associates". The adjudicating authority has also found p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e competent under Section 35B of the Central Excise Act. We shall now proceed to consider the substantive issue. The adjudicating authority has held that, by reason of the fact that one of the partners of SJA continued to run the business (after dissolution of the firm) with the same assets and from the same premises under the name and style of "Sita Juneja Associates", the firm continued to exist and hence the partners were jointly and severally responsible for all the liabilities of the firm. Yet another finding, still more relevant to the issue under our consideration, in the impugned order is as follows :- "Moreover, the instant case is not merely one of simple assessment of duty. The case pertains to the clandestine removals of the goods manufactured by M/s. SJA without payment of duty and the duty so evaded by anybody can be demanded and confirmed under Section 11A of the Act, either before, or after the dissolution of the firm under the Central Excise Law." (emphasis added) Obviously, the Commissioner accepted the case on hand as one of assessment of duty. The learned Commissioner has, however, taken the view that the duty on goods clandestinely removed can be assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment of a dissolved firm, there is no longer any scope for assessing the firm which ceased to have a legal existence. As in the present case, admittedly, the firm was dissolved before the order of assessment was made, the said order was bad. In this context as we have stated earlier, there cannot be a distinction on principle between an assessment made on a firm under a proceeding initiated before the dissolution and that made in a proceeding started after the dissolution. In either case, unless there is an express provision, no assessment can be made on a firm which has lost its character as an assessable entity. xxxxxxx Nor the provisions of the Partnership Act can possibly be called in aid to resuscitate a dissolved firm for the purpose of assessment. They deal only with the relationship between the partners and their rights and liabilities. They have no bearing on the question of assessment under a different statute." The above ruling was followed by the court in the case of Khushi Ram Behari Lai Co. also, wherein it was held that the view taken by the High Court of Punjab that the dissolution of partnership firm did not stand in the way of the assessing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o his order (hereinafter referred to as the "specified items" under Rule 173Q, giving option to M/s. Hotel Rajputana Palace Sheraton to redeem the goods on payment of a fine of Rs. 5.25 lakhs. Section 34 of the Central Excise Act provides that, whenever confiscation is adjudged, option shall be given to the owner of the goods to redeem the same on payment of such fine as the adjudicating authority deems fit. In the present case, M/s. Hotel Rajputana Palace Sheraton were, admittedly, the owners of the specified items when the show-cause notice was issued proposing to confiscate the same and when the adjudicating authority ordered confiscation. The question now is whether the specified items were liable to confiscation under Rule 173Q. Under this Rule, any excisable goods which were manufactured and removed in contravention of provisions of the Central Excise Rules were liable to confiscation. The show-cause notice had alleged that M/s. SJA had contravened Rule 9(1) read with Rules 173F and 173C inasmuch as they had removed excisable goods without payment of duty. It had also alleged that Rule 52A had been contravened by M/s. SJA by removing the goods otherwise than under Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny wooden furniture can be treated as handicraft within the meaning of Notification No. 76/86-CE, the Hon'ble Supreme Court's ruling in the case of Louis Shoppe is the final authority. The relevant part of the judgment of the apex Court is extracted below :- "The question is whether wooden furniture by itself can be treated as "handicrafts" within the meaning of Notification No. 76 of 1986 dated February 10, 1986? It must be said straightaway that furniture as such does not qualify as handicrafts. It may be characterized as "handicrafts" if the following tests are satisfied: "(1) It must be predominantly made by hand. It does not matter if some machinery is also used in the process. (2) It must be graced with visual appeal in the nature of ornamentation or in-lay work or some similar work lending it an element of artistic improvement. Such ornamentation must be of a substantial nature and not a mere pretence." Whenever the above question arises, the authorities shall examine the matter from the above stand-point and pass orders accordingly. The above principles shall apply to all pending matters and to all matters arising hereinafter." Their lordships have laid down two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context of giving the option as above, that the duty of Rs. 17,51,329.00 also be paid by M/s. Hotel Rajputana Palace Sheraton if the same had not already been paid by M/s. SJA. We have but to set aside this direction of the Commissioner for two reasons. Firstly, we have already set aside the demand of duty raised on M/s. SJA. Secondly, the above direction is beyond the scope of the show-cause notice wherein there was no proposal to demand 'duty on the goods from M/s. Hotel Rajputana Palace Sheraton.' 11.In the result, Appeal Nos. E/637 to 639/98-D are allowed and Appeal No. E/654/98-D is allowed in part. The impugned order stands set aside to this extent. Sd/- (P.G. Chacko) Member (J) 12.[Order per : V.K. Agarwal, Member (T)]. - I have had the opportunity to go through the Order as recorded by learned Member (Jud.). 1 find myself unable to agree with his findings that the Central Excise duty cannot be raised on M/s. SJA after the dissolution of the firm. The judgment of the Apex Court in the case of Jullundur Vegetable Syndicate, supra, was pronounced in view of the definition of the "dealer" contained in the East Punjab General Sales Tax Act, 1948. As per Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice for demanding duty not levied/not paid etc. relates to filing of return where the return is to be filed. Thus there is no provision in the Central Excise Act and Central Excise Rules, 1944 which is similar to the definition of "dealer" as given in Section 2(d) of the East Punjab General Sales Tax, 1948 on the interpretation of which the decision in Jullundhur Vegetables Syndicate was delivered. It cannot, therefore, be held that a partnership firm is a legal entity under the Central Excise Act. On the other hand, the Tribunal has held in many cases that no penalty is imposable on a partner when the penalty has been imposed on the partnership firm. The Tribunal has held in the case of Harish Dye Ptg. Works v. CCE, Surat-I, 2001 (138) E.L.T. 772 (T) that "where the assessee is a partnership firm it is not necessary, legally for me to consider the assessee as a different with that of the partner. I, therefore, do not consider it legally to impose penalty on the partner this is because partnership firm is not different from that of partner." Similarly in the case of B.C. Sharma v. CCE, Jaipur, 2000 (122) E.L.T. 158 (T), the Tribunal has held that "M/s. Agro Engineers Ltd, Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X
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